Ethical Issues with Supplier-Buyer Partnerships Tom Wopat was excited to learn of his appointment as Circuit Electronics Corporation’s sales representative to Household Appliance Inc. For the past four years, Circuit Electronics has supplied all of the electric switches used in Household’s washers and dryers. As Circuit Electronics’ sales representative, Tom’s job involves the following tasks.

1. Working with Household engineers to design electric switches that can be manufactured to meet Household’s cost and quality requirements.

2. Assisting Household in resolving any problems related to electric switches.

3. Monitoring the inventory levels of electric switches at Household and placing orders for additional switches when appropriate.

This appointment will require Tom to move to Stutgart, Germany, for two years. Although Tom has mixed feelings about the move, he is familiar with the success of the program in improving Circuit Electronics’ financial performance. He is also very much aware of the fact that the two previous sales representatives received promotions at the end of their appointments.

As Tom toured the Household factory in Stutgart with his predecessor, Catherine Bach, his excitement turned to concern. It became apparent that Circuit Electronics had not been supplying Household with the best available switches at the lowest possible costs. Although the switches were adequate, they were more likely to wear out after five or six years of use than would switches currently on the market

(and being used by Household’s competitors). Furthermore, taking into account the current number of switches in transit by ship from North America to Europe, it also appeared that the inventory level of electric switches would soon be more than enough to satisfy Household’s needs for the next four months.

Required If you were Tom, what would you do?