Becky Knauer recently resigned from her position as controller for Shamalay Automotive, a small, struggling foreign car dealer in Upper Saddle River, New Jersey. Becky has just started a new job as controller for Mueller Imports, a much larger dealer for the same car manufacturer. Demand for this particular make of car is exploding, and the manufacturer cannot produce enough to satisfy demand. The manufacturer’s regional sales managers are each given a certain number of cars. Each sales manager then decides how to divide the cars among the independently owned dealerships in the region. Because of high demand for these cars, dealerships all want to receive as many cars as they can from the regional sales manager.
Becky’s former employer, Shamalay Automotive, receives only about 25 cars each month. Consequently, Shamalay is not very profitable. Becky is surprised to learn that her new employer, Mueller Imports, receives more than 200 cars each month. Becky soon gets another surprise. Every couple of months, a local jeweler bills the dealer $5,000 for “miscellaneous services.” Franz Mueller, the owner of the dealership, personally approves payment of these invoices, noting that each invoice is a “selling expense.” From casual conversations with a salesperson, Becky learns that Mueller frequently gives Rolex watches to the manufacturer’s regional sales manager and other sales executives. Before talking to anyone about this, Becky decides to work through her ethical dilemma. Put yourself in Becky’s place.
1. What is the ethical issue 2. What are your options? 3. What are the possible consequences? 4. What should you do? STUDENT 1 POST: Makayla
big ethical issue that Knauer is dealing with here is that the Mueller
Company appears to be practicing bribery. Bribery is an “unethical
practice, as it increases wealth inequality and supports corrupt
regimes” (Thomas, 2017). The company receives over 175 cars more than
Knauer’s former employer. It is the manufacturer’s regional managers
that get to decide how many cars each company gets. It turns out that
they have been receiving gifts such as Rolex watches from Mueller
Imports, which could explain why they get so many more cars than other
companies such as Shamalay.
to doing anything, I would try to find out for sure what is going on
with the watches. Knauer had heard from several salespeople that the
company was buying them for the regional managers, but before jumping to
conclusions, she should do more research. Perhaps she can view the past
financial analysis to see how far back these purchases go, and how
often they are made. If there is a pattern that the jewelry purchases
are made every time regional managers are about to make a decision on
how many cars are going out to each company, then she has a legitimate
reason to believe they are doing something unethical.
doing her own research, she should talk to the higher ups in her new
company to get answers from them. If it turns out they have been
practicing bribery, she should tell them to stop ASAP. Individuals can
face up to $100,000 in criminal fines PER VIOLATION, and five years
imprisonment under the anti-bribery provisions (Lovells, 2018).
Depending on how many rolex watches they have bought already for
different people, the company is looking at some major charges so it's
definitely in their best interest to stop doing that.
Lovells, H. (2018). Anti-corruption and bribery penalties in the USA. Globe Business Media Group. Retrieved from https://www.lexology.com/library/detail.aspx?g=fba6bd7a-7f29-4da4-af9a-43d3a3065c38
Thomas, R. (2017). Ethics Analysis: Foreign Bribery. Seven Pillars Institute. Retrieved from https://sevenpillarsinstitute.org/ethics-analysis-foreign-bribery/ STUDENT 2 Post: Kennedy
1. What is the ethical issue?
The ethical issue in this scenario is that the dealership is "paying"
to receive a larger amount of the allotted cars that are available for
sale in the district. The manufacturer's regional sales manager should
be deciding how to split the cars among the local dealers based on
information like prior months sales. It puts other dealerships at a
disadvantage. It shouldn't matter whether a dealer can afford to give
the regional sales manager something extra, the ability to sell the cars
and handle the demand from the market should be the focus. Shamalay
Automotive, the smaller struggling dealership may not be struggling as
much if they were able to receive more cars.
2. What are your options?
One option would be to speak directly to her boss at her new
employers and explain the ethical dilemma that has been brought to her
attention. She could give them the opportunity to correct the action.
Hopefully the company would respond to the concerns but may not since
they are getting the cars that are in such high demand. Another option
would be to go outside of the company and report the actions that are
occurring. This may bring some unwanted attention to the company but it
may be exactly was is needed. Sometimes people need an outside pressure
to do the correct thing.
3. What are the possible consequences?
Possible consequences for Becky is that she may be fired. The company
may tell her that they won't change their actions and continue on with
the purchases of Rolex's for the sales manager and executives. Becky may
have to decide on her own to leave the company if they choose this
route. Another possible outcome is that they decide to change the action
and no longer make the payments. That would be the best possible
4. What should you do?
In this situation, I would definitely say something. This is unethical behavior and we are meant to speak up when we see these things going on. We become part of the problem if we don't say anything and let the actions continue. Even if it becomes the worst case scenario and you do loose your job, you can at least know that you stood up for what was right. Depending on the industry, they may have a way for you to report unethical behavior to an outside authority who could intervene if the route you choose was not successful. Overall, only we can help make the changes that we want to see in the world.