Question

It is Business Law, question no. 2

Case description

You have just been hired by Widget Corporation and, unfortunately, this company has just had a

suit filed against it in Texas. The President of Widget Corporation, your new boss, is going to

hire an attorney to litigate the case, but wants to first understand the potential issues of the

case. He has asked you to evaluate the situation and write a report identifying and discussing

both the procedural law and the substantive law issues the company will face. He also wants to

act in an ethical manner no matter what the legal results are, so he has also asked you to

include your own personal assessment of the ethical way to proceed in handling the case.

Widget Corporation, which manufactures and distributes widgets, is located in California and

incorporated in Delaware. Widget Corporation received an order for widgets from a customer in

Texas. Because it did not have any employees in Texas, Widget Corporation subcontracted a

local handyman, Lyle, to deliver and install widgets for the Texas customer. As part of the

contract for services, Widget Corporation provided Lyle with specific instructions as to how the

widgets needed to be installed. The contract was signed by Widget Corporation and by Lyle.

On the day of installation, the Texas customer inspected and accepted the delivery of the

widgets from Lyle. The Texas customer then instructed Lyle to proceed with the installation. Lyle

proceeded to install widgets. He installed nearly all of the widgets to spec, but then realized he

was running late for his son’s soccer game. He quickly installed the last widget, but could not

get the bolts to tighten to spec. Since he was in a rush, he did not realize the last widget was the

wrong widget. He gave up and rushed out the door to his son’s game. One week later, an

employee of the Texas customer was injured by the last widget Lyle installed. The Texas

customer has now filed a suit for $70,000 against Widget Corporation and the president of

Widget Corporation in Texas federal court for the injury sustained by its employee.

Course Project

Question no.:

Have four sheets memo on the ethical aspects of the case. What actions Widget Corporation should take to behave in an ethical manner and why you think this is the most ethical way to proceed. And other actions that Widget Corporation could take and but they are less ethical.

Answer 1

Ethics is a set of rules which defines whether a conduct is right or wrong. Business ethics can be written and unwritten codes of principles and values that determine or govern the actions and decisions of a company. The organisation itself sets standards for determining the difference between good or bad decision making and behavior. Some of the general business ethics that a company should follow are; ethics for human resource management, sales and marketing practices, ethics in production, intellectual property, knowledge, skills and should be loyal to their customers.

Subcontracting and outsourcing is a better option for every business to cope up with their business activity. In subcontracting the company brings in an outside company or induvidual to perform a specific part of a project. A contract is signed between them, where both the parties agree to do their parts well. The main company which preforms the project is called as the contractor and the company or individual hired to perform a specific task is called as the subcontractor. The main contractor is in charge and should oversee whether the subcontractor executes and and completes the task as specified in the contract. Outsourcing is the practice of having certain activities of the business done by an external agent. This is mostly performed when the company lacks in in-house resources, skill or even cost matters. Functions can be outsourced to an individual or to a firm. The difference between subcotracting and outsourcing is that, the tasks that one cannot be handled internally are contracted and in outsourcing the task can de performed by the firm but due to other reasons like cost, time ,labor hinders the activity when performed internally. Making a difference between both is rather subtle.

Here, since Widget Corporation does not have any employees in Texas,the company has subcontrated the work to a local handyman, Lyle. As per the case, the contract provides only the specific instructions about how to install the wedgets. As a company which follows ethics towards thier clients, the contract could be rather made as, their should not be any failure from the subcontractor till the last wedget is installed and should be rechecked and confirmed it to the contractor. Widget corporation could also possibly arrange one of its employee to accompany the subcontractor inorder to ensure that their occurs no failure or misleadings. This measures would have made the Widget corporation to keep their ethics. Here, both the contractor and the subcontractor failed to perform their duties well. Ethics is considered as one of the strongest pillar for building a business as it contribute to the goodwill of a firm.