Ethics Sembotix Company has several divisions including a Semiconductor Division that sells semiconductors to both internal and external customers. The company's X-ray ? Division uses semiconductors as a component in its final product and is evaluating whether to purchase them from the Semiconductor Division or from an external supplier. The market price for semiconductors is $100 per 100 semiconductors. Dave Bryant is the controller of the X-ray Division, and Howard Hillman is the controller of the Semiconductor Division. The following conversation took place between Dave and Howard: Dave: I hear you are having problems selling semiconductors out of your division. Maybe I can help. Howard: You've got that right. We're producing and selling at about 90% of our capacity to outsiders. Last year we were selling 100% of capacity. Would it be possible for your division to pick up some of our excess capacity? After all, we are part of the same company. Dave: What kind of price could you give me? Howard: Well, you know as well as I that we are under strict profit responsibility in our divisions, so I would expect to get market price, $100 for 100 semiconductors. Dave: I'm not so sure we can swing that. I was expecting a price break from a sister" division. Howard: Hey, I can only take this sister" stuff so far. If I give you a price break, our profits will fall from last year's levels. I don't think I could explain that. I'm sorry, but I must remain firm-market price. After all, it's only fair-that's what you would have to pay from an external supplier Dave: Fair or not, I think we'll pass. Sorry we couldn't have helped. Is Dave behaving ethically by trying to force the Semiconductor Division into a price FRAMEWORK FOR CASE ANALYSIS Step 1 Comprehend Case Situation Speed read case Read case carefully, taking notes, underlining Step 2 Diagnose Problem Area Identify problem areas List facts by problem area from notes and a rerereading of the case Use evidence to diagnose each problem in turn Step 3 State Problem State major problem State minor problems (optional) Step 4 Generate Alternatives List solutions to major problems List solutions to minor problems (if applicable) Step 5 Evaluate Alternatives and Select Construct t-account for each alternative List Pros and cons Weigh pros and cons and select best alternative Repeat above for minor problems Step 6 Defend Implementation List questions about the workability of the solution Develop a defense for each question Do above for minor problems
