Resolving Ethical Business Challenges

What are the potential ethical issues faced by ACME Corp? Frank from ACME corp. is leveraging his personal relationship and offering bribes and kickbacks to Otis of Thermocare to increase purchase contracts. This could potentially be a large problem if Thermocare becomes aware of such practices. The purchase of product should be warranted w/ quality of products and price structures, not because it gets you tickets to baseball games and Cancun. If ACME is competitive, there is nothing wrong with these kick-backs. If there is a better option for Thermocare, however, and Otis is choosing ACME for kickbacks alone, this becomes an ethical problem. If other customers of ACME or general public discovered these practices, they could damage their infrastructure thru lost revenue or hurt their public image.

What should ACME do if there is a desire to make ethics a part of its core organizational values?

If ACME wanted to adapt Ethics as part of its core organizational values, they should start in the same approach as the structure of the business, top-down. Amber may be Frank’s boss but does business no more ethical than Frank does. Instead of warning of ethical issues, she re-enforces the practice of bribing the client. Therefore, Amber requires ethical training as much as Frank does. Her manager likely needs Ethical training as well as anyone up the chain.

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Identify the ethical issues of which Frank needs to be aware.

Frank needs to be aware of ethical issues of bribery. He should understand that his personal reputation as well as ACME’s is at risk when conducting business in this manner. Frank should start by asking himself if Thermocare would be as interested in ACME’s product if Otis was not able to squeeze kick-backs out of Frank and Amber. Frank should also be aware that Amber, despite being his manager, is as un-ethical as Frank is. She specifically tells Frank that no one will find out about the funding for season tickets as well as the trip to Cancun.

Discuss the advantages and disadvantages of each decision that Frank could make.

The easiest thing Frank could do is continue the bribery, say by funding Otis’s night at the Adult Entertainment venue. This would keep Otis happy and coming back for more kick-backs. Otis, Frank, Amber and the rest of ACME corp. would materialistically benefit from this continued business practice. It is unknown whether or not Thermocare is benefitting from this relationship. It is clear, however, that someone is paying for this.

The disadvantage of continuing this bribery is clear. If the kick-backs become exposed to the rest of Thermocare, the client may terminate Otis and further sales with ACME Corp. If the rest of ACME Corp. found out about Amber and Frank’s methods, there would likely be disciplinary action. Additionally, if this matter became public, Frank and Amber could have jeopardized ACME’s reputation and severely hurt future sales with anyone.

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