What are the ethical considerations, if any, in this case

Case Study 10.3 Dumping inventory

  1. What are the ethical considerations, if any, in this case?

There are numerous ethical considerations evident in this case. For instance, there are ethical issues involving employers and salespeople. Ron, being the employer, demands Bill to work as a pre-convention or Level I employee. However, this is construed by Bill as an unethical decision. Additionally, customers are being handled unethically by the company. They have not being informed of the new toy model products, which will be purchased in a few months by the company the new models will make the already-bought products worthless. (Futrell, 2012). The customers have bought a strong relationship with the salesperson, and if this trust is broken, just like how Bill has done, the customers lose morale with the business. Dishonest and unethical practices can be damaging to the company’s reputation. Once a customer notices fraudulent practices, they can ruin the business’ brand by spreading the word to other customers. I saw this when I was buying my mp3 players. I was negotiating the cheapest model between the Apple iPod and Microsoft Zune (Futrell, 2012). I talked with a salesperson at the store who informed me that they were comparable in terms of price, and both performed the same. After going back and forth, I chose the Zune. I later found out that Microsoft would discontinue the Zune. I went back to the store and talked to someone else who told me they were trying to sell what they had and that no more would be in stock.

  1. At what level of moral development are Ron and Bill operating in this business situation? Explain your answers.

Bill is operating at Level 3 because he is trying to go by his moral code and do what he thinks is right by his customers. Ron is working at a Level 1 because he wants Bill to act unethically just so he can dump his inventory to make room for the new models (Futrell, 2012)

  1. What would you do if you were Ron?

I guess if I were Ron, then I would not be operating at a Level 3, more like a Level 1. In this case, I would continue to encourage Bill and the other sales associates to push the product for sales. I would maybe even offer them some incentive for making the most sales. If I were Ron and trying to become a better boss, then I would still try to push sales of the toy (Futrell, 2012). I would also encourage the employees to tell their customers what the scenario will be in six months when the product changes. I may even offer the new product to current owners at a discounted upgrade price.

  1. What would you do if you were Bill?

I think personally that if I were Bill, I would have to do what I think is best for my customers. I would still try to make sales with my customers, but I would warn them of the changing product line. I would try to apply the golden rule in this situation (Futrell, 2012). I wish that that salesperson would have been honest with me, and I probably would have chosen the iPod (even though the Zune still works perfectly fine).

Reference

Futurell, C., & Valvasori, M. (2012). ABC’s of Relationship Selling through service. 5th Canadian edition.

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