Case 4: Telemax, Inc.

Ellen St. James, a marketing director for Telemax, is walking through an antique store with Monica, a customer and friend. Ellen is in charge of a project called Stardust, a new telecommunication product in which her company has invested heavily. Monica informs Ellen that she has learned from a marketer at PCI, one of Telemaxs major competitors and the industry leader, that they are planning to introduce a product similar to Stardust. Ellen is immediately upset, but tries to hide this fact from Monica. Ellen states that she has heard about this product and asks Monica if she was able to find out when the product will be introduced. Monica states that she had asked the marketer this question, but he did not give her a straight answer.

Ellen is having lunch with Carl, her former subordinate at Telemax. Ellen and Carl start talking about work and Ellen confides to Carl that Stardust will be available in 90 days. Ellen explains that she needs to know when PCI is introducing its product because, if Stardust is introduced after or at the same time as PCIs product, Telemax probably will not be able to gain the needed market share. Ellen asks Carl for advice on how to get this information and he gives her several suggestions, including: putting someone on PCIs payroll, asking her customers for information, hiring a private investigator, and pushing Stardust through Telemaxs quality assurance department. Ellen, however, does not feel comfortable using any of these tactics. Carl recalls that Ellen hired an ex-PCI employee, Frank Cilento, and recommends that she finds out what he knows or can find out. Ellen remarks that Frank is up for a promotion. As the vignette closes, Ellen is left to consider whether to use the possibility of promotion as leverage with Frank.

Questions

1. What are the main ethical issues, if any, in the Telemax, Inc. case? Describe each ethical issue.

2. What are Ellens options? How do the three levels of moral development relate to Ellens situation? What would you do?

Case 6: Dumping Inventory: Should This Be Part of Your Presentation?

Ron Kapra is sales manager at Electra Toy Company, a retail toy store specializing in electronic games. Rons brother-in-law Jerry works for the company that manufactures the Lasertron electronic game. Jerry mentioned to Ron that the company is coming out with the Lasertron II in three months. However, it will not be announced to retailers for another two months.

Lasertron II will have advanced technology over the present model. The new game cartridges will not be compatible with Lasertron I. Once Lasertron II comes on the market, consumers will want it and not the present model. Jerry explains that for any of the present models the retailer returns after the introduction of Lasertron II, the manufacturer will refund to the retailer the retailers original cost of Lasertron I.

The Way to Make Extra Sales

Kapra has decided to run a special sale offering 20 percent off the regular price of Lasertron I. With 1,000 cases in stock, Ron wants to sell as many of the present model as possible to his customers. Then when the new model comes out, the same customers will come in and purchase

Lasertron II. This will greatly increase sales, Ron feels. Salesperson Is Unsure

Bill Corrington has been a top salesperson with Electra Toy for about two years. Although excited about the new model, Bill questions Rons idea. Bill feels his customers trust him. If he sold them Lasertron now and the new model came out in a few months, customers would be upset with him. Bill feels this is no way to treat customers. However, Ron sees nothing wrong. The loss of a few customers will be offset by the increase in sales, says Ron.

Questions

1. What are the ethical considerations, if any, in this case?

2. At what level of moral development are Ron and Bill operating in this business situation? Explain your answers.

3. What would you do if your were Ron? What would you do if you were Bill?