ETHICAL DILEMMA

Forecasting is one task that presents ethical dilemmas for sales managers. Consider a sales manager faced with endorsing a forecast for a new high-tech radio frequency identification (RFID) tracking device being developed by the company. Well call the sales manager Abby. Abby has asked an outside firm to present a sales forecast for the new product. The forecast is rosy, suggesting enough demand to warrant the hiring of about ten new salespeople. Abby is very excited about the prospects for this new product and plans a meeting with top management to present the plan for hiring additional salespeople. The meeting goes well, and Abby is given authority to expand the sales force immediately. Three salespeople are hired within the week, with plans for more.

A few weeks after the presentation, Abby reads an article about the business cycle. Many forecasters believe managers must take the business cycle into account when making predictions about high-ticket items because inevitable peaks in the health of the economy are followed every few years by a period of decline. The article predicts an upcoming decline. Abby also reads in a trade magazine that a competing firm with even more resources is developing a similar RFID device. After going back and reading the commissioned forecast report, Abby realizes the outside firm has not taken either of these pieces of information into consideration. If either is true, the forecast almost certainly overstates sales for the RFID tracking device.

Abby now faces the dilemma of either informing management that the forecast may be wrong, and the product will not live up to sales expectations, or trying to take corrective action that could include layoffs. Either of these courses could deal a blow to Abbys career, and many questions enter her mind: Maybe the business cycle doesnt exist? Maybe the other company wont be able to get the product to market quickly? Or maybe other companies are secretly working on the product as well?

What is Abbys best course of action from this point?