Question

You learned that one of your smaller, nonstrategic, suppliers directly emailed your salespeople (without your knowledge) with details of an incentive plan that would provide your salespeople with bonuses, paid directly by the supplier, if they met certain sales levels of their product over the next quarter.

• Is there anything wrong with this scenario? Why or why not?

• As the manager of the distributor, what would your next step be?

• What actions would you take, if any, in response once you found out about this program? Explain your actions.

Answer 1

Q: Is there anything wrong with this scenario? Why or why not?

A: Yes, it is unethical and unprofessional to offer incentives/bonuses to office salespeople especially without ones knowledge. This is tantamount to inducement or bribery and corruption and needs to be viewed seriously. The proof lies in the email directly sent by the supplier to the salespeople. Quid pro quo is unethical and immoral.

Q: As the manager of the distributor, what would your next step be?

A: The next step would be to review the contract and call in the supplier for an official meeting with the concerned officers in administration, purchases and accounts so that the mintues can be recorded. The supplier must be confronted with the unauthorized emails sent by the supplier to the salespeople as proof. The quid pro quo and corruption must be addressed and resolved at the earliest to set the right and stern example. A fresh tendor should be floated to select a new vendor/supplier in this case to ensure future transparency and accountability in the selection and appointment process of vendors.

Q: What actions would you take, if any, in response once you found out about this program? Explain your actions.

A: The immediate action is to review the contract and annul it with immediate effect. Since this is one of the smaller, non-strategic, suppliers the operations will not be significantly affected. It is always best to terminate contracts with unethical and unprofessional vendors to send the right stern signal and warning of zero tolerance against corruption in the organization and to abide by a moral code of conduct which includes transparency and accountability. A fresh tender needs to be floated for the selection and appointment of a new vendor. Warning the vendor will not suffice as the action of the vendor was deliberately mala fide towards inducement and corrupting the salespeople. Further, the salespeople need to be given an official warning against any such future misdemeanours and play the role of whistleblowers against such corrupt intentions or practices. It has not been mentioned in the case study as to how the manager found out about the unauthorized emails sent by the supplier to the salespeople.