A reseller sells "additional user" software licences to a client for a project, but installation will be delayed for some months, so third-party software licences are not acquired from the supplier immediately. When the software is eventually "supplied" to the end-user client, no CDs or licence keys are required. At a subsequent date it is "rediscovered" that the additional licences were never purchased from the supplier, and moves are made to acquire these. The Manager stops the Purchase Order being raised, wanting assurances that the licences were not purchased. Documentation is produced to show that licences were sold, these licences were never purchased from the supplier, and that the client has the additional licences. The Manager claims to "want to confirm other paperwork and negotiate a price with the supplier", but there is doubt that this is a genuine response. Perhaps there is no intention to purchase the licences from the supplier in the hope that the situation is not discovered. After a week, the paperwork seems to be back in the file to be forgotten again.

Question:

a. What is the ethical issue here to? What would be a policy address such behaviour in organisation? Consider the litigation risk from supplier.