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Anonymous
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ORIGINAL ASSIGNMENT:

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.


Requirements

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

Hello class,

The 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.

Prior 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.

After 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.

Stephanie

References

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 reaction.


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.

Tutor Answer

TutorLarra
School: UCLA

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