Ethical Dilemma Analysis: LA East's Purchasing Agent and a Supplier's Offer

Purchasing Agent Wonder World Trip Paul Backman is the head of the purchasing department for LA East, one of the so-called “baby bells” or regional phone companies that came into existence in 1984 after the divestiture of AT&T. Backman’s department is responsible for purchasing everything from wire for equipment lines to napkins for the headquarters cafeteria. S.C. Rydman, an electronics firm and a major LA East supplier, is a cosponsor of an exhibit at Wonder World in Florida. LA East, which has used Rydman as its major supplier since 1984, makes contract decisions on the basis of bids that Rydman and other submit in response to its requests for proposals. Paul Backman has final say on the electronics contracts because of the significant amounts of money involved. S.C. Rydman’s vice president and chief financial officer, Gunther Fromme, visited Backman in his office on April 3, 2009. Rydman had no bids pending and had been awarded a six-month contract by LA East on March 1, 2009.

 

Fromme explained to Backman, “Look, I’m just here for goodwill. But Rydman does have a block of rooms with room service at one of the hotels in Wonder World. If you like, you and your staff could go down there and use them. We also get free passes to the park. You could go to the park and see the good work we’ve done on our exhibit there. You and your families would just have to pay airfare. If you’re interested, just let me know when and how many.” Paul Beckman relayed the offer at the next staff meeting, where it was warmly received by everyone except Sheila Tate, who asked, “Should we accept free rooms and passes from a supplier?” Backman responded, “I could understand your concern if Rydman had a bid pending, but there won’t be anything for Rydman to even bid on for at least three months. If we go now, it’s just a friend’s favor.” 1.

 

Respect for Relationship with Stakeholders We will respect our relationships with our stakeholders, including shareholders, investors, customers, consumers, vendors, suppliers, local communities and employees, and will strive to maintain relationships that are both appropriate and friendly. Engage Ethically. We will be well-informed in the regulations, rules, and compliance issues that apply to our businesses around the world. We will apply this knowledge to our conduct as responsible employees and will adhere to the highest standards of ethical conduct in all that we do.

 

3. Integrity. Each of us brings to the workplace personal values which guide us to meet our commitments to customers, suppliers, colleagues, and others with whom we interact. We embrace truthfulness and trust, and we treat everyone with dignity and respect-as we wish to be treated ourselves. We are each personally accountable for the highest standards of behavior, including honesty and fairness in all aspects of our work. Describe the ethical dilemmas facing Backman.

 

Describe the personal values you bring to the dilemmas. Choose the corporate values you find relevant, compare them to your own, identify stakeholders whose viewpoints should be considered, and explain who should be involved in decision-making. Explain alternative solutions and their consequences. Explain your choice of action.