Robert Chin migrated to the United States of America from Malaysia after completing his

accounting bachelor's degree from a university in New Orleans.He works at Heritage Storage

Devices, Inc, as the finance director in charge of operation in Southeast Asia.Robert was

attracted to work at Heritage as his father and his brothers had worked in the company's factory

in his hometown of Bagan.

There were many complaints from customers in China about the hard discs manufactured

from Bagan plant.In fact, one client, a computer server maker Koko Company complained of the

constant need for their engineers to inspect the hard discs coming from the Bagan plant and to

return the hard discs for rework.There was one instance whereby Koko had to reject the whole

shipment of hard discs and due to a very tight manufacturing schedule at their plant, Koko insisted

that Heritage replace the hard discs with output from their Sibu plant.

Robert was asked to investigate the many complaints coming from the Bagan plant and

to make suggestions to remedy the situation.Robert found that the most of problems came from

the reporting of contamination cases in the Bagan plant.The engineering department had

deliberately understated the rework cases by randomly filing rework cases in the Enterprise

Resource Planning (ERP).Many cases were left unrecorded.Reject and End of Life items that

were supposed to be scrapped were recorded as good inventory in the system.

The records of the finished goods are in total disarray.The recording of the movement of

inventory from the store to the factory floor is haphazard.The manager of the procurement

section - which includes store management - is Robert's younger brother.

To make things worse, the internal audit was not aware of the reject as the manager in

charge of the department was a fresh graduate and had little working experience dealing with

engineering issues.

Robert's colleagues in the United States have long complained about the budgets

submitted by the Bagan plant.They were of the opinion that the budgets were overblown and the

estimates of scrap levels grossly understated.One colleague suggested that since Bagan was

operating at an inefficient manner, the Bagan plant should be closed and all work transferred to

the other plants in Sibu.

Knowing that the outcome of his investigation would result in the closure of the Bagan

plant, Robert was thinking of downplaying the impact of the customer rejects on the profits of the

Bagan operation by classifying the rejects and end of life inventory as work-in-progress instead

of impairing the goods.The closure of the Bagan plant will result in job losses in his hometown.

Even his family would not be spared.

Use the six-step approach to resolve the ethical dilemma.

Six-step approach to resolving ethical dilemma:

1. Obtain relevant facts.

2. Identify the ethical issues from the facts.

3. Determine who is affected by the outcome of the dilemma and how each person or group

is affected.

4. Identify the alternatives available to the person who must resolve the dilemma.

5. Identify the likely consequence of each alternative.

6. Decide the appropriate action.