RAJWANT ENGINEERING: SURVIVAL OR ETHICAL VALUES?

1. What are the main decisions that Sokhi needs to make?
2. Considering the rational decision-making model, describe the issues to be considered by Sokhi at each step.

IVEY Publishing 9B16C029 RAJWANT ENGINEERING: SURVIVAL OR ETHICAL VALUES? Atul Arun Pathak and Kshamta Sharma wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G ON1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright @ 2016, Richard Ivey School of Business Foundation Version: 2016-10-05 On October 16, 2014, H. S. Sokhi was wondering what he should do next. Sokhi was the owner of Rajwant Engineering Pvt. Lid. (REPL), a small-scale engineering and manufacturing company based in Jamshedpur, India. He had just had his first meeting with R. K. Gupta, the new procurement manager at ClientCo, REPL's most important client. Sokhi recalled the event: The meeting had been a complete disaster. I had hoped to secure an order that would have got REPL about $5 million in additional revenues." Gupta asked for a bribe in return for giving me a contract. I flatly refused and stormed out of the meeting. On returning, in a fit of anger, I drafted a letter addressed to ClientCo, seeking a termination of our current contracts with them and effectively ending our long standing relationship [see Exhibit 1]. Sokhi was about to send the letter when he was interrupted by a personal call from home. After the call, all he could do was sit and stare at the letter. For a man who had always prided himself on his decisiveness, his inability to decide what to do next was extremely frustrating. Sokhi realized that given his company's financial status, a continued relationship with ClientCo was essential, but compromising on his ethical values was not something he wished to do. If he lost this account, there was a real danger of REPL going bankrupt. He had a week to get back to Gupta, or else he would likely lose the contract. BACKGROUND REPL was a small engineering and manufacturing company based in Jamshedpur, an industrial town in the state of Jharkhand, in eastern India. Sokhi had started REPL over three decades earlier, soon after completing his education. He grew up in a family environment where honesty and integrity were highly valued. Consequently, Sokhi developed REPL into a highly ethical, values-driven organization right from the start. Over the last thirty years, REPL had successfully executed a variety of engineering projects for large and prestigious clients across different industries (see Exhibits 2 and 3). Sokhi related his achievements: On the request of REPL, the name of the client organization has been changed to protect confidentiality. Throughout the case, this client organization is referred to as ClientCo. = INR = Indian rupee; all currency amounts are in