Progressive Applications Corporation, a developer and distributor of business applications software, has been in business for five years. The company’s main products include programs used for list management, billing, and accounting for the mail order shopping business. Progressive’s sales have increased steadily to the current level of $25 million per year. The company has 250 employees.

Andrea Nolan joined Progressive approximately one year ago as accounting manager. Nolan’s duties include supervision of the company’s accounting operations and preparation of the company’s financial statements. No one has noticed that in the past six months Progressive’s sales have ceased to rise and have actually declined in the two most recent months. This unexpected downturn has resulted in cash shortages. Compounding these problems, Progressive has had to delay the introduction of a new product line due to delays in documentation preparation.

Progressive contracts most of its printing requirements to Web Graphic Inc., a small company owned by Rob Borman. Borman has dedicated a major portion of his printing capacity to Progressive’s requirements because Progressive’s contracts represent approximately 50 percent of Web Graphic’s business. Nolan has known Borman for many years; as a matter of fact, she learned of Progressive’s need for an accounting manager through Borman.

While preparing Progressive’s most recent financial statements, Nolan became concerned about the company’s ability to maintain steady payments to its suppliers; she estimated that payments to all vendors, normally made within 30 days, could exceed 75 days. Nolan is particularly concerned about payments to Web Graphic; she knows that Progressive had recently placed a large order with Web Graphic for the printing of the new product documentation, and she knows that Web Graphic will soon be placing an order for the special paper required for Progressive’s documentation. Nolan is considering telling Borman about Progressive’s cash problems; however, she is aware that a delay in the printing of the documentation would jeopardize Progressive’s new product.

Required:

1. Describe Nolan’s ethical responsibilities in this situation.

2. Independent of your answer to requirement (1), assume that Nolan learns that Borman of Web Graphic has decided to postpone the special paper order required for Progressive’s printing job.

Nolan believes Borman must have heard rumors about Progressive’s financial problems from some other source because she has not talked to Borman. Should Nolan tell the appropriate Progressive officials that Borman has postponed the paper order? Explain your answer.

3. Independent of your answers to the first two requirements, assume that Borman has decided to postpone the special paper order because he has learned of Progressive’s financial problems from some source other than Nolan. In addition, Nolan realizes that Jim Grason, Progressive’s purchasing manager, knows of her friendship with Borman. Now Nolan is concerned that Grason may suspect she told Borman of Progressive’s financial problems when Grason finds out Borman has postponed the order. Describe the steps that Nolan should take to resolve this situation.