Jim Willis was the vice president of marketing and sales for international satellite images (ISI). ISI...
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Jim Willis was the vice president of marketing and sales for international satellite images (ISI). ISI had been building a satellite to image the world at a resolution of one meter. At that resolution, a trained photo interpreter could identify virtually any military and civilian vehicle, as well as numerous other military and non-military objects. The ISI team had been preparing a proposal for a Japanese government contractor. The contract called for a commitment of a minimum imagery purchase of $10 million per year for five years. In a recent executive staff meeting, it became clear that ISI satellite camera subcontractor was having trouble with the development of a thermal stabilizer for the instrument. It appeared that the development delay would be at least one year and possibly 18 months. When Jim approached Fred Ballard, the president of ISI, for advice on what launch date to put into the proposal, Fred told Jim to use the published date because that was still the official launch date. When Jim protested that the use of an incorrect date was clearly unethical, Fred said, "Look Jim, no satellite has ever been launched on time. Everyone, including our competitors, publishes very aggressive launch dates. Customers understand the tentative nature of launch schedules. In fact, it is so common that customers factor into their plans the likelihood that spacecraft will not be launched on time. If we provided realistic dates, our launch dates would be so much later than those published by our competitors that we would never be able to sell any advanced contracts. So do not worry about it, just use the published date and we will revise it in a few months." Fred's words were not very comforting to Jim. It was true that satellite launch dates were seldom met, but putting a launch date into a proposal that ISI knew was no longer possible seemed underhanded. He wondered about the ethics of such a practice and the effect on his own reputation. ISI had been negotiating with Higashi Trading Company (HTC), a company that had provided most of the imagery for civilian and military use to the Japanese government, for the past six months. It was no secret that HTC had also been meeting with representatives from Lockart and Global Sciences which are competitors in the satellite imaging industry in the US, HTC had sent engineers to ISI to evaluate the satellite and its construction progress. Jim Willis believed that ISI was currently the front-runner in the quest to sign HTC to a $10 million annual contract. Over five years, that one contract would represent one sixth of the contracts necessary to ensure sufficient venture capital to complete the satellite. Jim was concerned that if a new launch date was announced, HTC would delay signing a contract. Jim was equally concerned that if HTC learned that Jim and his team knew of the camera design problems and knowingly withheld announcement of a new launch date until after completing of negotiations, not only his personal reputation but that of ISI would be damaged. Furthermore, as with any franchise arrangement, mutual trust was critical to the success of each party. Jim was worried that even if only a 12-month delay in launch occurred, trust would be broken between ISI and the Japanese. Jim's boss, Fred Ballard, had specifically told Jim that the launch date information was company proprietary and that Jim was to use the existing published date when talking with clients. Fred feared that if HTC became aware of the delay, they would begin negotiating with one of ISI's competitors, which in Fred's opinion were not likely to meet their launch dates either. This change in negotiation focus by the Japanese would then have ramifications with the venture capitalists who Fred had assured that a contract with the Japanese would soon be signed. Jim knew that with the presentation date rapidly approaching, it was time to make a decision. Discussion Questions 1. Internal factors may cause managers to be placed in ethically compromising positions. What are the sources of factors which created the ethical dilemma? 2. In evaluating and determining an ethically sound course of action for ISI, would you consider it ever appropriate to withhold negative information from the client? 3. Given the opportunity to identify and evaluate possible positive and negative ramifications to the course of action that they have selected, what should ISI do? 4. To illustrate the concept of moral relativism in making ethically questionable decisions, explain the term "industry practice" and indicate whether you would consider this as an example of moral relativism. 5. With reference to Kohlberg's levels of moral development, in what level of moral development is Jim Willis? His boss, Fred Ballard? 6. Considering the value of a Code of Ethics in a business organization, would a code of ethics have prevented or resolved this ethical dilemma? What should be in a code of ethics? What if ISI had a Code of Ethics which stated that proprietary information could not be disclosed to anyone outside the company and allowed no exceptions. 7. What would the three basic approaches to ethical behavior: utilitarian, individual rights, and justice approach say about full disclosure versus withholding? Jim Willis was the vice president of marketing and sales for international satellite images (ISI). ISI had been building a satellite to image the world at a resolution of one meter. At that resolution, a trained photo interpreter could identify virtually any military and civilian vehicle, as well as numerous other military and non-military objects. The ISI team had been preparing a proposal for a Japanese government contractor. The contract called for a commitment of a minimum imagery purchase of $10 million per year for five years. In a recent executive staff meeting, it became clear that ISI satellite camera subcontractor was having trouble with the development of a thermal stabilizer for the instrument. It appeared that the development delay would be at least one year and possibly 18 months. When Jim approached Fred Ballard, the president of ISI, for advice on what launch date to put into the proposal, Fred told Jim to use the published date because that was still the official launch date. When Jim protested that the use of an incorrect date was clearly unethical, Fred said, "Look Jim, no satellite has ever been launched on time. Everyone, including our competitors, publishes very aggressive launch dates. Customers understand the tentative nature of launch schedules. In fact, it is so common that customers factor into their plans the likelihood that spacecraft will not be launched on time. If we provided realistic dates, our launch dates would be so much later than those published by our competitors that we would never be able to sell any advanced contracts. So do not worry about it, just use the published date and we will revise it in a few months." Fred's words were not very comforting to Jim. It was true that satellite launch dates were seldom met, but putting a launch date into a proposal that ISI knew was no longer possible seemed underhanded. He wondered about the ethics of such a practice and the effect on his own reputation. ISI had been negotiating with Higashi Trading Company (HTC), a company that had provided most of the imagery for civilian and military use to the Japanese government, for the past six months. It was no secret that HTC had also been meeting with representatives from Lockart and Global Sciences which are competitors in the satellite imaging industry in the US, HTC had sent engineers to ISI to evaluate the satellite and its construction progress. Jim Willis believed that ISI was currently the front-runner in the quest to sign HTC to a $10 million annual contract. Over five years, that one contract would represent one sixth of the contracts necessary to ensure sufficient venture capital to complete the satellite. Jim was concerned that if a new launch date was announced, HTC would delay signing a contract. Jim was equally concerned that if HTC learned that Jim and his team knew of the camera design problems and knowingly withheld announcement of a new launch date until after completing of negotiations, not only his personal reputation but that of ISI would be damaged. Furthermore, as with any franchise arrangement, mutual trust was critical to the success of each party. Jim was worried that even if only a 12-month delay in launch occurred, trust would be broken between ISI and the Japanese. Jim's boss, Fred Ballard, had specifically told Jim that the launch date information was company proprietary and that Jim was to use the existing published date when talking with clients. Fred feared that if HTC became aware of the delay, they would begin negotiating with one of ISI's competitors, which in Fred's opinion were not likely to meet their launch dates either. This change in negotiation focus by the Japanese would then have ramifications with the venture capitalists who Fred had assured that a contract with the Japanese would soon be signed. Jim knew that with the presentation date rapidly approaching, it was time to make a decision. Discussion Questions 1. Internal factors may cause managers to be placed in ethically compromising positions. What are the sources of factors which created the ethical dilemma? 2. In evaluating and determining an ethically sound course of action for ISI, would you consider it ever appropriate to withhold negative information from the client? 3. Given the opportunity to identify and evaluate possible positive and negative ramifications to the course of action that they have selected, what should ISI do? 4. To illustrate the concept of moral relativism in making ethically questionable decisions, explain the term "industry practice" and indicate whether you would consider this as an example of moral relativism. 5. With reference to Kohlberg's levels of moral development, in what level of moral development is Jim Willis? His boss, Fred Ballard? 6. Considering the value of a Code of Ethics in a business organization, would a code of ethics have prevented or resolved this ethical dilemma? What should be in a code of ethics? What if ISI had a Code of Ethics which stated that proprietary information could not be disclosed to anyone outside the company and allowed no exceptions. 7. What would the three basic approaches to ethical behavior: utilitarian, individual rights, and justice approach say about full disclosure versus withholding?
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Answer 1 Jim Willis boss Frank Ballard has given Jim a specific instruction not to disclose the info... View the full answer
Related Book For
Basic Marketing Research
ISBN: 978-1133188544
8th edition
Authors: Tom J. Brown, Tracy A. Suter, Gilbert A. Churchill
Posted Date:
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