Question

J.R. accepted a position at Cripple Creek Vocational University and he and his family made a permanent move. Soon, J.R. was promoted to Administrative Vice President, overseeing the purchasing department of the University. His oldest son, Jim, got a good job in educational equipment sales at Tiddley Computer Corporation in Fort Worth.

As Vice President, J.R. quickly saw the need for 4 to 5 computers in his office. Although CCVU had a bidding policy, J.R. purchased Tiddley Corporation's computers direct from Tiddley for about $3500 each, when IBM clones were selling for around $2000 and the clone had more promising features than the Tiddley. Jim handled the sale and received a healthy commission on the sale. If the purchase had gone through the normal bidding process, the TC model would not have been selected. Tiddley's local Cripple Creek franchise dealer objected to Tiddley Corporation that his protected franchise had been bypassed in the deal.

Questions:

1. Since J.R. was over the purchasing department and had final decision authority, should purchasing have gone through the normal bidding routine?
2. Is it acceptable for a V.P. to bypass the normal routine to do business with a family member?
3. Was J.R.'s decision not to request bids an ethical choice?
4. What should the college purchasing agent do?
5. Should anyone else at CCVU have any interest in this activity?
6. Has Tiddley's Cripple Creek franchise owner been wronged?
7. Should Jim have made the sale? Received a commission?

Answer 1

Truly. Independent of who is accountable for the office, the procedure ought to be followed. Be it buying or requesting or selling. As an association and foundation, each office has the duty to be taught and follow the procedure. They ought to have followed a typical offering schedule.

No. It isn't satisfactory that a VP sidestep the ordinary daily schedule to work with a relative.

No. JR's choice not to demand offer was a deceptive decision. This favors his family yet not his association (key partner).

The school buying specialist ought to carry this to notice of the board in the school. We ought not overlook that JR's choice has cost the establishment $1500 extra per PC.

The organization all in all is hampered by the choice of JR. The board, principals, and the understudies should all be keen on this movement.

Truly. Tiddley's Cripple Creek establishment proprietor has been wronged. By typical procedure, the organization ought to have reached the neighborhood establishment first. Be that as it may, this was not done.

There is no issue in Jim making the deal. He and his organization ought to be free to put an offer and take an interest in the offering procedure. Be that as it may, they should win the offering procedure through a reasonable procedure. In the event that Jim could win against different contenders, for example, IBM clones and Tiddley's Cripple Creek establishment then there is no damage in him getting a commission.