Carter’s Computers manufactures computers and all components. The purchasing agent informed the company owner, Abraham Carter, that another company has offered to supply keyboards for Carter’s computers at prices below the variable costs at which Carter can make them. Incredulous, Mr. Carter hired an industrial consultant to explain how the supplier could offer the keyboards at less than Carter’s variable costs. It seems that the competitor supplier is suspected by the consultant of using many illegal aliens to work in that plant.

These people are poverty stricken and will take such work at substandard wages. The purchasing agent and the plant manager feel that Carter should buy the keyboards from the competitor supplier as “no one can blame us for his hiring practices and will not even be able to show that we knew of those practices.”

a. What are the ethical issues involved in this case?

b. What are the advantages and disadvantages of buying from this competitor supplier?

c. What do you think Mr. Carter should do and why?