Case Study #1 AAA Inc.
1. How could AAA have avoided the problems it experienced with Comstock?
2. What are the potential implications of the type of contract AAA used? Discuss
3. How could AAA have improved its approach to sourcing in this case?
4. What should AAA do now? Discuss
Case Study #2 Better Late Than Never Bid
1. Did Lisa do the right thing? Was it ethical? Should she be commended for saving $6000?
There are different aspects of the case that may be assessed as ethical or unethical relative to the orientation of the analyst. Deciding whether or not Lisa Evans was ethical requires reflective analysis of the factors that affected her decision.
In a book written by Treviño and Nelson (2004), three approaches were identified in arriving at ethical judgment. These are the consequentialist theories, deontological theories and virtue ethics. Correspondingly, these theories proposes that decisions may be focused and derived from 1) the consequence of the action made, 2) duties, obligations and principles of the person involved in the case or 3) the actor’s character, motivations and intentions.
In this light, the case may be evaluated on the basis of the following: 1. the proposal of the original bidders were cancelled in favor of Praire Manufactuing, Inc. and may be interpreted as disregard for values of honesty and fairness. As such, Lisa Evans may be considered unethical in this premise. 2. the Central, who was tight on budget, had a savings of $5,750.00 from Praire’s low but late bid. This may be used as an argument to justify Lisa’s action as ethical. 3. Lisa Evans decided singly as the supply manager of Central in declaring the original bids as unreasonable and accepting Praire’s bid; 4. the intention of Lisa Evans for favoring Praire was not clearly established in the case but it is evident that she is expecting Praire to submit the lowest bid.
Considering all these factors, Lisa may have made a wise decision to help Central save funds but not necessarily in an ethical way. The consequences of her action may result to a more complex and harmful effect to others. Lisa has treated the three original bidders without merit. Disregarding their right for a fair treatment deprives them to enjoy equal opportunity to compete and gain revenue.
Further, Lisa may have compromised her integrity by deciding alone on the matter at hand. The intention of Lisa may not have been well established in the given facts but one may assume that her motivation to favor Praire is rooted on a personal interest. Thus, commending Lisa for saving funds is not appropriate.
2. Would it have made any difference if the original bid opening had been public?
Opening the bid to the public will serve as advantage for Central as it will widen their choice of suppliers. If Lisa decided not to limit the invitation, unethical practices could have been avoided. Generally, the number of suppliers determines the availability of good prices. Consequently, Central will not be dependent on Praire who have previously done most of their lockers.
On the other hand, Lisa’s motivation to this bid will play as crucial determinant whether or not opening it to the public will make a difference in this case. If Lisa’s intention was not to save the Central’s budget but for personal gain, Praire would still win the bid notwithstanding the availability of lower bids.
3. How might this look to the original bidders?
The unfair treatment made by Lisa Evans may discourage the original bidders and other allied suppliers from participating in future invitations to bid. They may boycott Central and eventually gain a supplier bargaining power. The ability of the original bidders to refuse or supply in small quantity may increase their pricing power at some degree (Thompson, et. al., 2006). This is a crucial factor in determining the bargaining power of suppliers and will ultimately affect Central’s bargaining power negatively.
Case Study #3 The Case of the Secret Discount
1. Is there an ethical problem here?
2. What additional information does buylow need, if any?
3. What are his options?
4. What advice would you give buylow?
Case Study #4 The Big D Company
1. What action should the company take in the area of inventory control? Use an analysis to support its strength and weaknesses.
2. What is your reaction to the argument of those who oppose tighter controls?
3. How would your recommendation in answering question #1 differ if this company were making a single product?
4. How does the inventory control problem change as the company’s overall volume of business increases?
5. Do you think that Big D could benefit from the establishment of a supply chain management department? What functions should it include?