Question

Suppose you are a salesperson and your company's CRM forecasts that your quarterly sales will be substantially under quota. You call your best customers to increase sales, but no one is willing to buy more.

Your boss says that it has been a bad quarter for all the salespeople. It's so bad, in fact, that the vice president of sales has authorized a 20 percent discount on new orders. The only stipulation is that customers must take delivery prior to the end of the quarter so that accounting can book the order. "Start dialing for dollars," she says, "and get what you can. Be creative!"

Using your CRM information system, you identify your top customers and present the discount offer to them. The first customer balks at increasing her inventory: "I just don't think we can sell that much."

"Well," you respond, "how about if we agree to take back any inventory you don't sell next quarter?" (By doing this, you increase your current sales and commission in this quarter, and you also help your company make its quarterly sales projections . The additional product is likely to be returned next quarter, but you think "Hey, that's then and this is now.")

"OK," she says, "but I want you to stipulate the return option on the purchase order."

You know that you cannot write that on the purchase order because accounting won't book all of the order if you do. So you tell her that you'll send her an email with that stipulation. She increases her order, and accounting books the full amount.

With another customer, you try a second strategy. Instead of offering the discount, you offer the product at full price but agree to pay a 20 percent credit in the next quarter. That way you can book the full price now. You pitch this offer as follows: "Our marketing department analyzed past sales using our new information system, and we know that increasing advertising will cause additional sales. So, if you order more product now, next quarter we'll give you 20 percent of the order back to pay for the advertising."

In truth, you doubt the customer will spend the money on advertising. Instead, it will just take the credit and sit on a bigger inventory . That will kill your sales to the company next quarter, but you'll solve the problem when you get to it next quarter.

Even with these additional orders, you're still under quota. In desperation, you decide to sell product to a fictitious company that you say is owned by your brother-in-law. You set up a new account, and when accounting calls your brother-in-law for a credit check, he cooperates with your scheme. You then sell $40,000 of product to the fictitious company and ship the product to your brother-in-law's garage. Accounting books the revenue in the quarter, and you have finally made quota. A week into the next quarter, your brother-in-law returns the merchandise.

Meanwhile, unknown to you, your company's ERP system is scheduling production. The program that creates the production schedule reads the sales from your activities (and those of other salespeople) and finds a sharp increase in product demand (imagine that!). Accordingly, it generates a schedule that calls for substantial production increases and schedules worker for the production runs. The production system, in turn, schedules the material requirements with the inventory application, which increases raw materials purchases to meet the increased production schedule

Regarding your shipping to the fictitious company:

1/ Is your action ethical according to the categorical imperative perspective? Explain.

2/ Is your action ethical according to the utilitarian perspective? Explain.

3/ Is your action legal?

Answer 1

1. Evaluating the 'shipping to a ficticious comopany'option as per the categorical imperative perspective:

a. Identify the CRM's maxim i.e. the principle he would forulate as a justification of his action. In this case it may be written as: "I am to do x in circumstance y in order to promote z''

x: manipulate company system to inflate sales for the immediate quarter

y: contingent situations to increase sales for current quarter

z: sales to achieve company targets

b. Generalize: Everyone manipulates company system to inflate sales for the immediate quarter in contingenct situations to increase sales for current quarter to promote sales to achieve company targets

c. Identify the PSW (Perturbed Social World): In PSW, no one shall expect people to increase sales as they will know that the CRMs will manipulate the system to achieve results which may make the company suffer in the long haul.

Hence, as the maxim wono't be true in the PSW, this action is not ethical according to categorical imperative perspective.

2. Utilitarian perspective: Evaluating the consequence, probability and the utility of the action we can conoclude that the sales of the company WILL fall in the next quarter for sure, the utility of this action is extremely LOW to the company. Hence, this is not ethical from the utilitarian perspective.

3. Legal perspective: This action can have serious implications on the legal aspect. The company is ficticious and this knowledge is shared by the employee and the brother. Moreever, the companies systems such as the production/ purchase systems get manipulated for employee's personal gains can be attributed to not working in company's interest by the employee. Such clause, if not there in the employee agreement may still be enforceable as conscious misrepresenation that will result in pecuniary loss to the company.