Question

Valco

Tom has been named the manager of a large new chemical plant that is still to be designed and constructed. Tom’s responsibilities are to assemble and supervise the design staff; ensure that the plant is safe, operable, and maintainable; and start up the plant after construction. Tom recommends that the design staff specify a new ValCo valve to replace traditional gate valves.

Consider the Following Series of Cases:

Use the line-drawing techniques described in Chapter 2, section 2.4 to determine if each of the scenarios within the following case is an example of conflict of interest or not.

• Case 1: ValCo valves are superior to traditional gate valves because they seal more tightly and more quickly. After a large number of ValCo valves have been ordered, Jim, the ValCo salesman and a former classmate of Tom’s, visits Tom and gives Tom a pen with the company logo stamped in gold. The pen is worth $5. Should Tom accept this pen?
• Case 2: Same as Case 1, except that, instead of offering Tom a $5 pen, Jim invites Tom to play golf at an exclusive country club. Should Tom accept the golf invitation?
• Case 3: Same as Case 2, except that Jim offers to sponsor tom for membership in an exclusive country club. Should Tom accept the offer of sponsorship?
• Case 4: Same as Case 3, except that Jim makes his offer before ValCo valves have been ordered. Should Tom accept the offer of sponsorship?
• Case 5: Same as Case 4, except that ValCo valves are inferior traditional gate valves. Should Tom accept the offer of sponsorship?
• Case 6: Same as Case 5, except that, instead of offering to sponsor Tom’s membership in an exclusive country club, Jim says he will treat Tom to an all-expenses-paid trip to the Bahamas. Should Tom accept the trip?

Each of the above cases assumed that Jim and Tom were former classmates. What difference if any, would it make to any of these cases if Jim and Tom had never previously met each other?

Answer 1

Given Information :

Tom : Manager of a large new chemical plant .Still to be designed and constructed (Work is in progress)

Responsibilities :

• To assemble and supervise the design staff
• Ensure that the plant is safe, operable, and maintainable
• Start up the plant after construction.

Suggestion from Tom :

The design staff specify a new ValCo valve to replace traditional gate valves

Assumption :

Jim and Tom were former classmates

Jim and Tom had never previously met each other

Analysis :

Case 1

• ValCo valves are superior to traditional gate valves ( Seal more tightly and more quickly)
• Large number of ValCo valves have been ordered,
• Jim, the ValCo salesman and a former classmate of Tom’s
• In visit Jim gives Tom a pen with the company logo stamped in gold
• The pen is worth $5

Now in above case as a transactions is huge.Tom has given bulk order to Jim company.Its a culture of big organization when a deal , transactions takes place they gives to respective person a token of gift.So as i token of gift Tom should accept that gift.Provided with the cost of gift should not be high.

Case 2

• Jim invites Tom to play golf at an exclusive country club

Now as per first assumption 1 as Tom & Jim known to each other , so there is not any issue of accepting the invitation of playing a golf.

For second assumption ,Tom should accept the invitation on the ground of there should not be any wrong expectations of Jim from Tom.

Only the case is that Tom should not take a undue advantage of giving order to Jim because of that he will take this gift as a bribe.

Case 3

• Jim offers to sponsor tom for membership in an exclusive country club

Here analysis will be same as like solution for case 2.

Now as per first assumption 1 as Tom & Jim known to each other , so there is not any issue of accepting the invitation of playing a golf.

For second assumption ,Tom should accept the invitation on the ground of there should not be any wrong expectations of Jim from Tom.

Only the case is that Tom should not take a undue advantage of giving order to Jim because of that he will take this gift as a bribe.

Case 4 :

• Makes his offer before ValCo valves have been ordered

See here the intention is very important .Whether Tom accepts the offer before or after placing the order is least important.But he accepts the offer on any condition then that is out of ethics.Here in this case Tom can accept the offer by considering the company ethics & 2 defined assumptions.

Case 5 :

• ValCo valves are inferior traditional gate valves

In this case Tom should not accept the offer on the basis of  inferior traditional gate valves.He can accept the offer only on his personal relations & there should not be relation with that offer & that work order.

Case 6 :

Again the same solution , Tom should not accept the offer as it directly , indirectly indicated bribe .There is no relation ship between the work order & all-expenses-paid trip to the Bahamas. If he is sponsoring the trip for his personal relations & personal work then he can accept.

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When any company executive is receiving the gift from supplier following things are important:

1) Intention of both

2)Quality of goods / services

3)Relation among the Supplier & Executive

4)Amount of the order

5)Supplier comparison chart

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