Question

Ch. 2 p. 64-65

EYK2-3) Ethics Case Great Cake is a large bakery known for its quality “boxed cake” products. Its motto is “We Use Only the Best Ingredients.” Ralph Sands, the purchasing supervisor, is responsible for ordering the ingredients for all the bakery products. He is being considered for a promotion based on his proven ability to purchase ingredients at the best price available.

The cost of all the ingredients has risen substantially over the past few months. Sands decides to purchase 2.5% of the ingredients at a lower quality than Great Cakes normally uses because the cost is significantly less. Without relying on the company’s test kitchens, he believes this substitution will not be noticed by the customers and the lower cost will counterbalance the increased costs of the other ingredients.

Sands explains this decision to his friend, Lynn Pall, the company’s accountant, one day at lunch. He also tells her that he does not intend to inform management of the inclusion of the lower-quality ingredients in the bakery’s products.

Required

What ethical considerations arise from Ralph Sands’ decisions? What problems face Lynn Pall because of his actions?

Answer 1

Ralph Sands is considering to use lower quality inputs to offset the cost of other costly inputs is certainly not ethical. Customers have brand loyalty and believe that the product they use made by a certain brand is trust worthy and also expect it to maintain the same quality irrespective of the economic situations. This can lead to the customers loosing trust in the business and loss of goodwill if the same is discovered by either any internal party or any external to the business. Also, when the management discovers of Ralphs tricks just to gain a promotion the same may not be looked upon as good and can backfire in the future.

Lynn here faces a situation of a ethical dilemma since Ralph has disclosed of the course of action that he is going to take just to gain a promotion and win appreciation of his seniors and never disclose the fact. Lynn faces more of a whistle blower responsibility situation since he must disclose the unethical practices being followed by a colleague which may harm the long term prospects of the business.