An Ethical Scenario To Ponder

Class, the following case study was originally printed in the April 2012 issue of the IIA's periodical,Tone at the Top.

"Larry is a young port engineer who works energetically for his shipping company, overseeing repairs and related projects. He is proud when put in charge of a multimillion-dollar repair order for one of his company's ships. The repairs are contracted out to a major shipyard, and everything goes smoothly until the end of the project. When Larry is handed the bill, he realizes it has been inflated by about one-third of total project costs.

Larry is shocked. He has never been confronted by such an apparently corrupt practice before. After delaying the "sign off" for a couple of days, he approaches his boss, points out what is going on, and explains why he cannot sign off. His boss asks for specifics, which Larry readily supplies.

A meeting is arranged between shipyard and shipping company officials, who go over the disputed items. They agree the shipping company is being overbilled by millions of dollars. To Larry's surprise, however, there is little reaction from either side of the table. Nor is there any definitive, ethical stance from his company.

The meeting adjourns until the next day, when shipyard officials meet again and this time offer to split the difference. For approval, both parties turn to Larry who explains he cannot sign off on the adjusted bill. Again, the meeting adjourns with no apparent reaction, and Larry is left in a daze. By the time of the third meeting, Larry begins to piece things together. Apparently his superiors respect his integrity. They are following orderly procedures to arrive at a final bill. But he cannot help noticing their lack of outrage and conviction.

What drives them to such a compromise?Larry is left wondering about the tone at the top of his organization. Is he out of step with the corporate culture? Will he be protected if he vehemently expresses his disapproval and outrage?"

Class, suppose you are Larry.What should you say or do during this third meeting?What are your thoughts on this scenario?