Becky Knauer recently resigned from her position as controller for Shamaly 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 receive as many cars as they can from the regional sales manager. Becky’s former employer, Shamalay Automotive, receives only about 25 cars each month.
Consequently, Shamalay is not very profitable. Becky is surprised to learn that her new employer, Mueller Imports receives more than 200 cars each 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 conversions 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. Requirements, using the IMA Statement of Professional Practice as your guideline, answer the following four questions in Microsoft Word. What is the ethical issue?
What are your options?
What are the possible consequences?
What should you do?
The ethical problem is that the Mueller’s owner is bribing the regional sales representatives in order to get more cars . Sales managers have important ethical responsibilities with regard to their own actions as well as the actions of their salespeople. One often reads in the trade press or hears of such matters as price bribes.