The issue on whether or not Lisa Evans was ethical in canceling the original bids and awarding the project to Praire Manufacturing, Inc. Question 1 Did Lisa do the right thing? Was it ethical? Should she be commended for saving $6,000? There are different aspects of the case that may be assessed as ethical or unethical relative to the orientation of the analyst. Deciding whether or not Lisa Evans was ethical requires reflective analysis of the factors that affected her decision. In a book written by Trevino and Nelson (2004), three approaches were identified in arriving at ethical judgment.
These are the consequentialist theories, deontological theories and virtue ethics. Correspondingly, these theories proposes that decisions may be focused and derived from 1) the consequence of the action made, 2) duties, obligations and principles of the person involved in the case or 3) the actor’s character, motivations and intentions. In this light, the case may be evaluated on the basis of the following: 1. the proposal of the original bidders were cancelled in favor of Praire Manufactuing, Inc. and may be interpreted as disregard for values of honesty and fairness. As such, Lisa Evans may be considered unethical in this premise.
2. the Central, who was tight on budget, had a savings of $5,750. 00 from Praire’s low but late bid. This may be used as an argument to justify Lisa’s action as ethical. 3. Lisa Evans decided singly as the supply manager of Central in declaring the original bids as unreasonable and accepting Praire’s bid; 4. the intention of Lisa Evans for favoring Praire was not clearly established in the case but it is evident that she is expecting Praire to submit the lowest bid. Considering all these factors, Lisa may have made a wise decision to help Central save funds but not necessarily in an ethical way.
The consequences of her action may result to a more complex and harmful effect to others. Lisa has treated the three original bidders without merit. Disregarding their right for a fair treatment deprives them to enjoy equal opportunity to compete and gain revenue. Further, Lisa may have compromised her integrity by deciding alone on the matter at hand. The intention of Lisa may not have been well established in the given facts but one may assume that her motivation to favor Praire is rooted on a personal interest. Thus, commending Lisa for saving funds is not appropriate. Question 2
Would it have made any difference if the original bid opening had been public? Opening the bid to the public will serve as advantage for Central as it will widen their choice of suppliers. If Lisa decided not to limit the invitation, unethical practices could have been avoided. Generally, the number of suppliers determines the availability of good prices. Consequently, Central will not be dependent on Praire who have previously done most of their lockers. On the other hand, Lisa’s motivation to this bid will play as crucial determinant whether or not opening it to the public will make a difference in this case.
If Lisa’s intention was not to save the Central’s budget but for personal gain, Praire would still win the bid notwithstanding the availability of lower bids. Question 3 How might this look to the original bidders? The unfair treatment made by Lisa Evans may discourage the original bidders and other allied suppliers from participating in future invitations to bid. They may boycott Central and eventually gain a supplier bargaining power. The ability of the original bidders to refuse or supply in small quantity may increase their pricing power at some degree (Thompson, et.
al. , 2006). This is a crucial factor in determining the bargaining power of suppliers and will ultimately affect Central’s bargaining power negatively. Alternative Courses of Action Business ethicists ask, “What is right and wrong, good and bad, and harmful and beneficial regarding decisions and actions in organizational transactions? ” Ethical “solutions” to business and organizational problems may have more than one alternative, and sometimes no right solution may seem available (Weiss, 2006). This statement proved to be true in the analysis of this case.
Different angles have to be considered to arrive at an ethical solution. The following questions developed by Laura Nash were enumerated in the book of Weiss and served as the guideline for determining the alternative courses of action in this case: 1. Have you identified the problem accurately? 2. How would you define the problem if you stood on the other side of the fence? 3. How did the situation occur? 4. To whom and to what do you give your loyalty as a person and as a member of the corporation? 5. What is your intention in making this decision? 6.
How does this intention compare with the probable results? 7. Who could your decision injure? 8. Can you discuss the problem with the affected parties before you make your decision? 9. Are you confident that your decision will be valid over a long period? 10. Could you disclose, without qualm, your decision? 11. What is the symbolic potential of your action if understood? If misunderstood? 12. Under what conditions would you allow exceptions? Further, Weiss identified the following criteria to help systematize and structure arguments and was utilized as a guide to design an alternative plan:
1. Moral reasoning must be logical. Assumptions and premises, both factual and inferred, used to make judgments should be known and made explicit. 2. Factual evidence cited to support a person’s judgment should be accurate, relevant and complete. 3. Ethical standards used in reasoning should be consistent. When inconsistencies are discovered in a person’s ethical standards in a decision, one or more of the standards must be identified. Considering all the preceding guidelines, four alternative courses of action were identified. They all offer possible solutions to the problem and these are: 1.
Cancel all bids after fair examination and judgment that original quotes are limited or unacceptable and conduct another round of bidding open to the public. 2. Extend the closing date and open the bidding to the public. 3. Among the original bidders, award the project to the supplier with the lowest quote. 4. Contact Praire and inform about the invitation to bid prior to the closing date. Among the alternatives, examining and judging fairly the original quotes is the most ethical solution to the problem. Objectivity in the process will help establish good relationship with suppliers and save managers like Lisa from being unethical.
Alternative 1 The first option Lisa Evans may do to ethically decide on the matter is to objectively establish that the original bids are limited and that more quotes from suppliers is needed. This may be done following this process: 1. Form a bidding committee composed of representatives from the Central’s different departments. 2. Discuss among the committee members the quotes given by the original bidders and assess fairly its appropriateness to Central’s budget. 3. If the committee found the available quotes too limited to decide, the members may vote to cancel all the bids and open a second round of bidding to public.
4. Inform the original bidders of the decision of the committee and give them the option to re-apply their quotation. 5. Gather all bids submitted and confer the results in the committee. Discuss all factors to be considered in the acceptance of a supplier, i. e. quality, price and capacity. 6. Conduct a vote to determine the winning bidder. This alternative has the following advantages: 1. Responsibility to decide on awarding bids will be shared to the members of the committee and will not be limited solely to Lisa Evans. This way, question on integrity will be lessened, if not totally eliminated.
Further, conducting the process in a group will avoid an individual to advance his or her personal interest. 2. Suppliers will have confidence on the decision of the committee. This can give Central an opportunity to establish good relationship with its clients. 3. Ethical atmosphere at Central will be created with the careful and fair deliberation of critical decisions. This may serve as example to other departments on how to conduct sensitive matters fairly and ethically. Alternative 2 The second option Lisa may consider is to extend the deadline for submission of bids and invite the public to bid.
Lisa is expecting a lower bid from Praire, as stated in the major facts of the case. As such, Lisa may avoid showing bias against other bidders by opening the bid to the public and not solely to Praire. She may opt to decide on this alone or with the help of a bidding committee similar to the first proposal. The steps to be followed are: 1. Inform the original bidders that the quotations submitted were limited and did not meet the expectations of the Central. 2. Send invitation to the public for the second round of bidding. If the three original bidders decide to re-submit their quotation, they shall be allowed.
These are the positive results expected from this alternative: 1. Lisa may avoid questions from the original bidders by allowing them to re-submit a new quotation. Thus, saving the integrity and uplifting the ethical standards of her office. 2. The possibility of receiving a quote from Praire increases as well as lower bids from other suppliers. On the other hand, this solution may also create negative effects. It may delay the completion of the project and may even fail to meet the deadline set to install the gym’s lockers.
Conducting a second bidding may consume time and resources of Central. The original bidders may also find the extension of the deadline unreasonable and unfair. Alternative 3 Choosing from among the three original suppliers may be considered as an alternative solution to avoid unethical consequences. As stated in the case, the three suppliers are reputable. Central may not have saved their budget but the quality of the supplier’s work may be worth it. It may even turn out better than Praire. Ultimately, choosing this alternative will dissolve the ethical problem of this case.
However, this may spell as poor cost management and may send a message to the suppliers that Central has a weak bargaining power. Alternative 4 The last possible solution to resolve this case is to communicate with Praire prior to the deadline of the bidding. It was established in the case that Praire has previously supplied Central’s lockers. In consideration of this, communicating with Praire may be considered as an act of maintaining good business relationship. However, this may also be interpreted as undue bias against other suppliers and may compromise the integrity of Lisa’s office.
It may also imply to Praire that Central is dependent on them which can result to Praire’s manipulation of supply prices. Recommendation and Conclusion Practice of ethics in an organization is important in creating a working environment that is governed by right morals and values. Consciousness for the need of ethics promotes responsibility to one’s actions and may even contribute to workers’ productivity (Ghillyer, 2008). In this case, Lisa is confronted with an ethical dilemma that tested her ability to decide ethically and to serve as an example to her co-employees.
Upon consideration of all the facts and the advantages and disadvantages of the alternative courses of action, the analyst find the first given option as the best solution to resolve the problem. Compared to all other options, creating a committee to decide on the bidding case offers a solution not only to the problem at hand but it can also serve as guideline to future activities at Central. It will delimit the authority of one person from deciding arbitrarily to serve a personal interest. More importantly, it will promote a high ethical standard in the workplace benefiting all the stakeholders of the organization.
In conclusion, it is important for an organization to establish ethical standards. The management should be responsible in promoting the exercise of ethics in their respective workplace and may be guided by the following suggestions: 1) the organization’s chief executive must fully support the program; 2) consider establishing an ethics committee at the board level; 3) consider establishing an ethics management committee; 4) consider assigning/developing an ethics officer; 5) consider establishing an ombudsperson; and 6) note that one person must ultimately be responsible for managing the ethics management program (McNamara, C. , n. d. ).
The values of honesty and fairness also played a crucial role in choosing the best solution to this problem. Ultimately, it will create a ripple of positive feedback from among members of the Central including external stakeholders of the Central. As Heesun Wee puts it in his BusinessWeek online article in 2002, “avoiding scandal isn’t the only reason to observe a stringent code of conduct. Doing the right thing also generates more tangible dividends. ” In this case, ‘tangible dividends’ includes Central having better options of suppliers and most especially having ethically upright employees.
These are advantages that can never be discounted in today’s complex business world. References Business Ethics Primer. International Business Ethics Institute. Retrieved November 29, 2008 from http://www. business-ethics. org/primer. asp Ghillyer, A. (2008) Business Ethics: A Real World Approach. McGraw-Hill Irwin. New York, New York, USA. McNamara, C. (2008) Complete Guide to Ethics Management: An Ethics Toolkit for Managers. Free Management Library. Retrieved November 29, 2008 from http://www. managementhelp. org/ethics/ethxgde. htm#anchor26548. Newton, L. & Ford, M.
(2002) Taking Sides: Clashing Views on Controversial Issues in Business Ethics and Society. McGraw-Hill/Dushkin. Guillford, Connecticut, USA. Poznak Law Firm Ltd. (n. d. ) Approaches to Ethical Decision Making. Retrieved November 29, 2008 from http://www. poznaklaw. com/articles/bizethics. htm. Thompson, A. , Gamble, J. , & Strickland, A. J. (2006) Winning in the Marketplace: Core Concepts, Analytical Tools, Cases. The McGraw-Hill Companies, Inc. New York, New York, USA. Trevino, L. & Nelson, K. (2004) Managing Business Ethics: Straight Talk About How to Do It Right.
John Wiley and Sons, Inc. Hoboken, New Jersey, USA. Wee, H. (2002). Corporate Ethics: Right Makes Might. BusinessWeek. Retrieved November 29, 2008 from http://www. businessweek. com/print/bwdaily/dnflash/apr2002/nf20020411_6350. htm? mainwindow. Weiss, J. (2006) Business Ethics: A Stakeholder and Issues Management Approach, 4th Edition. Thomson South-Western, Mason, Ohio, USA. What Would You Do? Business Ethics: The Magazine of Corporate Responsibility. Retrieved November 29, 2008 from http://www. business-ethics. com
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