Ashford University Intriguing Legal and Ethical Issues Discussion

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Description

Timmco, Inc. is a publicly traded corporation located in Denton, Texas that makes and sells high pressure industrial spraying equipment used in all sorts of commercial liquid spraying applications. It prides itself on top quality and promotes its products as “100% made in the USA”.

Sales have been declining recently due to competition from lower priced competitors and Timmco is looking for ways to reduce costs. One option under consideration is to find a new source for the high-pressure valves used in its products. These valves are complicated mechanisms that operate under very high internal pressure. If the valve was to burst, it would spray pieces of metal in all directions and pose a significant hazard to anyone standing nearby including the operator of the equipment. Timmco currently has a contract to purchase 1,000 valves a year at $2,500 per valve from Blagg Industries, a small privately owned business located in Boone, North Carolina. The contract has been in place for three years and has two more years to run.

Blagg Industries has a dozen employees. Timmco is its primary customer. If Blagg Industries loses Timmco’s business, it will have to lay off employees and might even go out of business.

Timmco is considering outsourcing the valves from Sanco, an overseas supplier in the country of Slawrovia, instead of buying valves from Blagg Industries. The Sanco valves only cost $1,000 each, but are known to be of lower quality than the Blagg Industries valves and are more likely to burst. Sanco can supply these valves at such low cost because they pay their workers, including children, less than the equivalent of $5 per day and work them long hours in hot, dangerous conditions.

Slawrovia is a poor country, but it has a large government bureaucracy and there is a lot of red tape involved in getting approval to export manufactured goods to other countries. In fact, it might take more than a year for Sanco and Timmco to obtain the necessary approvals for Sanco to export the valves to Timmco. Fortunately, the CEO of Sanco is related to the Slawrovia Minister of Commerce and has told Timmco that the necessary approvals can be obtained in less than a week if Timmco makes a $20,000 “gift” to the Slawrovia Minister of Commerce.

In addition to finding a new, low cost valve supplier, Timmco plans to increase sales by running a new marketing campaign that focuses on their commitment to American made quality. The tagline will be “Made in the USA by Americans, for Americans.”

You are a high-level executive at Timmco. Analyze the legal and ethical issues presented by the Timmco scenario. Your legal and ethical analysis should include breach of contract and remedies, negligent torts, product liability, the Foreign Corrupt Practices Act, and deceptive advertising and should incorporate a discussion and application of one or more of the ethical theories from Chapter 4 of the course textbook Business law: The Ethical, Global, and E-Commerce Environment.

Your legal and ethical analysis should,

  • Analyze breach of contract and remedies
  • Analyze negligent torts
  • Analyze product liability
  • Analyze the Foreign Corrupt Practices Act
  • Analyze deceptive advertising
  • Incorporate a discussion and application of one or more of the ethical theories from Chapter 4 of the course textbook Business Law: The Ethical, Global, and E-Commerce Environment.

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Explanation & Answer

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1

Legal and Ethical Issues – Timmco Case Study

Student’s Name
Institutional Affiliation
Professor’s Name
Date

2

Intriguing Legal and Ethical Issues in the Case Study of Timmco Incorporation
Business professionals and partners are facing an ever-dynamic practice and competition
environment. Forces from within and outside the business frontier are influential in the complex
business partnership and product supply deals. Competition is the order of the day and the
survivors of the tough competitive business environment leave a rebuilding foundation for the
future. As the world of business is convoluted with widening business scope, product designs,
closely defined brands and ubiquitous technology prevalence, the aspects of ethical and legal
decisions and responsibilities come to play. Timmco Inc. is the case study for this paper’s
intriguing argument and analysis on legal and ethical issues in business operations.
Being one of the top-level executives for Timmco, Inc. comes with intense stakes of
interaction with civil liability, ethical paradigms when it comes to potential product and quality
defects. Switching from one product specification to another and the subsequent integration
stages calls for heightened tests on legal and ethical attributes. For instance, Timmco, Inc.
specializes in high pressure industrial spraying products and the giant has constantly invested on
ways to remain afloat in the competitive market landscape. Things are not okay and changes in
the market domain are threatening Timmco’s future. One of the key decisions in store is
changing the supplier and vendor they sourced the key component of high-pressure valve used in
the spraying equipment. The move has been triggered by the conceptual and operational default
of the equipment bursting and causing havoc with tiny metal shards. Adjusting the valve
structural strength and capability should be highly tested to ensure high-level equipment and
operation security. As opposed to Sanco Company, Timmco’s supplier, the Blagg Industries
have epitomized safety standards for their valves.

3

In the corporate space, many companies have been hit by unfortunate incidences and
challenges of ethical complexities. As the top executive of Timmco, Inc. it is highly helpful to
learn from the past encounters of General Motors. The challenge of defective ignition switch and
systems dragged the auto giant into a deep legal battle in 2014. The company was compelled to
recall over 2.5 million vehicles from the market. The situation was abysmally degrading and the
company’ image and reputation in quality standards were adversely tainted. The economic sand
operational impact of the issue was highly pressing and the solution would not singularly come
from GM. The case scenario of General Motors is just but a preliminary example that Timmco,
Inc. ought to learn and rebuild from.
For Timmco, the first challenge and issue to address is the pre-existing relationship and
contract agreement with the present valve vendor, Blagg Industries. With only three years into
the partnership deal, breaching the contract becomes a huge business, ethical and legal concern.
The thresholds and requirements for the Timmco –Blagg Industries deal should be filled in good
time. In some incidences, both parties miss the targets and expectations out of the contract and
the relevant courts battle is incepted. Before any contract-termination agreement is made, they
must in...


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