Ethics and Social Responsibility

Matthew is upset. "That's fraud." Chris appears unconcerned. "It's not fraud. We've got the contract. What's the difference if we record the sales in this quarter or next quarter? " As CEO, what should you do?

Don't record the sale because it's not a sure thing until the contract is signed. By recording future sales on the "promise" of a contract, you are misleading investors as to the financial state of the company.

Tonya speaks up. "Look, that's the mainstay of our promotional campaign, and sales of those blocks have gone through the roof since we started running those ads. That campaign has cost the company thousands of dollars, and if you change the packaging, that'll cost a fortune. I think we're nitpicking here." Jackson responds hotly, "I don't consider false advertising to be nitpicking." As CEO, what should you do?

Order another set of tests from an independent testing lab to determine the validity of the test results before making a decision.

Jack agrees. "Let's face it. This goes on all the time. It's a different culture over there. We don't even know if these reports are true, but even if they are, you know how the media is. It'll be headlines for a day and then the next big story will hit and everyone will forget about it. I say we move forward with this." Everyone looks to you for a decision. What should you do?

Put the joint venture on hold until you can investigate whether the allegations are true.

Now you're even more confused. "Okay, so she violated company policy, and the penalty is clear. I repeat: What's the problem?" There's a long pause before Chris continues. "She's my top performer. She's practically doubled sales in her territory. I can't afford to lose her. Can't we make an exception just this once?" As CEO, what should you do?

Terry must be fired immediately. Not only has she violated company policy, but this is a serious ethics violation, and it cannot and will not be tolerated.

I spoke to one building inspector here, and he said he'd put a rush on the permit if we paid him $1,000. You know as well as I do that it's a bribe, but we need to get construction started. What do you want me to do? You know that the Foreign Corrupt Practices Act (FCPA) prohibits U.S. firms from paying bribes to foreign officials. But you need that permit or construction will be delayed for months. What are you going to do?

The law is the law. Tell your plant manager that he should not pay the bribe because it is against the law.

Much to your dismay, the tests confirm that the antibacterial agent does not "stop bacteria in its tracks" as your ad campaign and packaging claim. As CEO, what will you do next?

Withdraw the current ad campaign, issue a press release acknowledging the error, and withdraw products from store shelves to change the packaging.

You've decided to launch an investigation into whether the allegations of child labor at Primo's factories are true. Your fact-finding team learns that children as young as 14 are working full time at the factories. However, workers in El Salvador are legally eligible to work full time at age 14, so the company is operating within the laws of that country. How will this information impact your decision on whether to pursue the joint venture? Everyone looks to you for a decision. What should you do?

You will continue with the joint venture only if Primo agrees to develop an after-work educational program for these younger workers so that they can continue their education.