Case Study on Business Ethics: Holiday Cheer or Ethical Dilemma?

Williams had joined Star Corporation, one of the leading consumer electronics company, only a few days back as the Purchase Manager and he was going through the employees conduct manual. He was attracted by the clause, prohibiting acceptance of gifts by the employees of the purchase department. It read as follows:

“Purchase department employees shall not accept gifts from vendors. This is to ensure that no vendor is given any special treatment and the employees work only in the best interest of the firm at all times. Any deviation from the above would be dealt with severely and could mean dismissal from the firm.”

Williams remembered his experience with his previous firm, Maple Corporation, where he had worked from 2000 for six years as purchase head prior to joining the Star Corporation.

It was only six months since he was with the Maples when it was New Year. With the New Year came some inconsequential gifts like ball pens and key chains. The rule in the firm was that an employee could accept no gift worth more than 25 USD.  One day one of the vendors brought three wall clocks, one for the MD, one for the GM, and one for Williams. The vendor explained that as his firm had purchased the clocks in bulk they cost only 25 USD each and as such there should not be any hesitation in accepting the same. He added that in any case he is going to accept the Maple’s calendar and dairy for his firm in return. Williams found it hard to believe that the clocks were only worth 25 USD. He decided to take the matter to the MD of the firm.

The MD had one look at the clocks and called his secretary to take one of the clocks meant to be given to the MD to be placed on the wall in his office and told Williams to distribute others as desired by the vendor explaining that in bulk the clocks would cost about 25 USD only. Williams had taken the clock and given to his wife and it became the center point in their living room. In later years with the Maples he had taken gifts of dubious value always proclaimed worth less than 25 USD. To keep his conscience clear he would make sure to give some gift from his firm to the vendor’s salesman in return. Williams in fact stopped feeling any remorse on receiving the gifts and in fact he started looking forward to the festive season in anticipation of some nice gifts. (In his heart he knew that none of the gifts could be of less value than 3000 USD.)

Now again it was festive time and in the new firm he was not sure how he should react to the gifts, which had become such a part of business calendar in nations corporate world. He was musing on the matter when Riz the Executive Assistant to the MD walked in. Riz wanted to know if any gifts had started arriving or not. He confirmed that it has been the practice with the previous purchase manager also to accept the gifts and distribute them to the important persons of the firm like himself. He added that not a word about the matter should be discussed with the MD; otherwise there was every chance of that being thrown out of the firm. But if he did not accept the gifts, he would annoy quite a lot of his colleagues.

Williams was wondering if this was just a ploy of the MD to test his integrity, as the MD’s secretary would be in the MD’s confidence. At the same time Williams could not risk taking a chance of annoying a large number of his new friends in the firm.

Sure enough, next day a vendor came with ten baskets, each having three bottles of scotch whiskey, return air tickets for four to any destination in Malaysia with four nights five star hotel stay thrown in. The total value of each of the gift baskets was nearly 50000 USD. His secretary told Williams that this was just the beginning and the gifts were also quite cheap compared to gifts from other vendors. Williams wondered if his predecessor was thrown out of the firm on account of the gifts he was receiving from the vendors, which were amounting to large amounts and were practically bribes. Williams had no one to guide him at the moment.

Questions to Discuss:

  • Please give your sincere advice to Williams in his hour of predicament?

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  • EthicalManager

    With regard to the work ethics he should not accept the gifts. He should not have accepted from the previous company as well. Any person even with a meager integrity will have some inclination to the persons who gives him valuable gifts and that will not be in the best interest of the company.