Question

Ethical ISSUE

tell the highlights of the ethical issues, analyze the situation, and answer each of the questions .

Situation :

Becky Knauer recently resigned from her position as controller for Shamalay Automotive, a small, struggling foreign car dealer in Upper Saddle River, New Jersey. Becky has just started a new job as controller for Mueller Imports, a much larger dealer for the same car manufacturer.
Demand for this particular make of car is exploding, and the manufacturer cannot produce enough to satisfy demand. The manufacturer’s regional sales managers are each given a certain number of cars. Each sales manager then decides how to divide the cars among the independently owned dealerships in the region. Because of high demand for these cars, dealerships all want to receive as many cars as they can from the regional sales manager.
Becky’s former employer, Shamalay Automotive, receives only about 25 cars a month. Consequently, Shamalay was not very profitable.
Becky is surprised to learn that her new employer, Mueller Imports, receives over 200 cars a month. Becky soon gets another surprise. Every couple of months, a local jeweler bills the dealer $5,000 for “miscellaneous services.” Franz Mueller, the owner of the dealership, personally approves payment of these invoices, noting that each invoice is a “selling expense.” From casual conversations with a salesperson, Becky learns that Mueller frequently gives Rolex watches to the manufacturer’s regional sales manager and other sales executives. Before talking to anyone about this, Becky decides to work through her ethical dilemma . put yourself in becky's place :
a. What is the ethical issue?
b. What are your options?
c. What are the possible consequences?
d. What should you do?

Answer 1

The matter here is that it seems that Mueller is enticing the manufacturer’s regional sales managers and executives. Mueller is approving these invoices as a “selling expense.” Mueller is not performing an moral specialized practice which is charted by the IMA and states principles of uprightness, impartiality, neutrality, and accountability. By what Mueller is doing he is totally taken honesty and impartiality and thrown it out the window. There is no way the manufacturer’s regional manager is being impartial if they are getting gifts and accepting Rolex watches and gratifying Mueller with 200 cars each month.

          According to the IMA, Becky has a few choices if she believes there is an moral predicament. They include: discussing the state of affairs with an instant supervisor, an objective consultant, and if mandatory an attorney

          The classification of “selling expense” is inexact because we know selling expenses comprise things like sales salaries, sales commissions, advertising, depreciation on store buildings and equipment, store rent, utilities on store buildings, property taxes on store buildings, and delivery expense .The penalties of the company getting caught would be a loss in integrity and most probable business. If the manufacturer is caught accepting enticements they will likely have to answer to the Securities and Exchange Commission and or the Department of Justice. They could face paying huge penalties and losing a lot of investors.

          If I were Becky, I would talk over my conclusions with my direct supervisor, or if I didn’t trust that that would portend well for me in fear of losing my job, I would seek an impartial party to talk over with. Perhaps some sort of secrecy would be helpful.