Business Ethics Article of the Month
Reprinted with permission from Business Ethics
What Would You Do?
Should Mary Buy Her Own Bonus?
By Shel Horowitz
If she donated $1,000 for a school to buy products, she would hit her million-dollar goal.
Mary Kantarian was achingly close to making her million-dollar sales goal — only $1,000 short. If she made the goal by the end of the year, it would mean a fat $10,000 bonus check, and a happy trip to the bank to finance a dream home she’d recently found. Other sales reps also were close, and one had already made the bonus. The books would close in just a few days, but at the end of the year her clients weren’t in a buying mood.
Still, Mary had one hope: inner-city Lincoln High School. Its students, who often had to share textbooks, could really use her company’s multimedia educational aids, but Lincoln had no discretionary budget for new teaching materials. What if Mary donated the money to this needy school for the purchase, and put herself over the magic quota?
Or perhaps she could offer partial “donations” to close sales at several schools. She would then surpass her quota goal with room to spare. The Lincoln school or other needy schools would gain immensely valuable educational programs that would help them serve their students, her company would pick up sales revenue, and she would meet her sales quota. Even better, she would earn a cool $10,000 on an investment of $1,000.
At first thought, this seemed like a win-win solution. But the idea needled Mary’s conscience. The more she thought about it, the more something about it bothered her. Yet if she didn’t close this “sale” — one which would help out disadvantaged students — she wouldn’t make that bonus, and her dream house would remain out of reach. She found herself wondering, What should she do?
Richard Burch, Adjunct Professor, Fairfield University Program
in Applied Ethics, Fairfield, Conn.
MARY SHOULD FIND BETTER WAYS to help Lincoln H.S. find the funds. Are there other corporate sponsors or community funds available? Could she pursue a school fund-raiser, or government grant? As an alternative, Mary could seek out more qualified prospects, or ask current customers to increase an order.
Trying to pull off the proposed “donation” scheme would be no easy task. Product donations usually have to be without strings. Cash gifts will buy what’s needed most, like textbooks, not multimedia aids. Also, school systems, like corporations, have formal purchasing procedures, including sign-off points in the purchase-order process that uncover kickbacks and bribes disguised as donations.
Each rep knew where the others stood. What would be their reactions when they found out Mary made her quota this way? And what if everyone did this? What would be the impact on the company, other sales people, and other schools that would want the same special consideration? And what good is a customer who next time around expects the same deal?
Aside from the possible consequences of this deal, Kant would remind us we should do the right thing for the right reason. Mary is under a moral obligation to act loyally and to protect the legitimate interests of her employer. She should act in the interests of those who depend on her, even if those interests aren’t always the same as her own.
What Actually Happened
Mary decided not to pursue offering Lincoln High School a donation. She wasn’t comfortable with the idea, and she knew that her sales manager and superiors all the way up the line would object, on both ethical and practical grounds.
Mary didn’t make her bonus. But her reputation as a hard worker who maintains her integrity under pressure led to a promotion and higher pay two years later.
Shel Horowitz (firstname.lastname@example.org) is author of Principled Profit: Marketing That Puts People First, and a Hadley, Mass., consultant in marketing who initiated the Business Ethics Pledge movement; www.principledprofits.com.
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The Center for Business Ethics at Bentley College is a nonprofit educational and consulting organization. Offers free email subscription to “Ethics Matters Magazine”. Website contains links to other ethics newsletters, research publications and related material.
The Illinois Institute of Technology’s Center for the Study of Ethics in Professions. Contains index of professional codes of ethics for many types of businesses.
E-Center for Business Ethics at Colorado State University. Information on business ethics, corporate citizenship and organizational compliance. The goal of the e-business center is to create a virtual community of organizations and individuals that share best practices in the improvement of business ethics. Links to ethics articles, journals and magazines.
The Center for Ethics and Business at Loyola Marymount University in Los Angeles aims to provide an environment for discussing issues related to the necessity, difficulty, costs and rewards of conducting business ethically. Site contains extensive list of links to other ethics resources.
The Center for the Study of Ethics at Utah Valley State College developed these business case studies as part of their Ethics across the Curriculum seminar. Even though the cases in this section are somewhat generic in nature, they are designed to address personal and corporate ethics situations that could occur in any business environment.
Business Ethics Associations
Website for “Business Ethics Magazine”. Contains articles related to business ethics, corporate social responsibility and socially responsible investing. Offers free subscription to “BizEthicsBuzz” monthly e-mail newsletter.
Website of The International Business Ethics Institute, a private, nonprofit, nonpartisan, educational organization that promotes promotes business ethics and corporate responsibility through public awareness. Also works closely with companies to assist them in establishing effective international ethics programs. Website contains articles from “International Business Ethics Review”, a business ethics primer and links to other resources.
The Society for Business Ethics (SBE) is an international organization of scholars engaged in the academic study of business ethics and others with interest in the field. Website contains the SBE newsletter and links to other business ethics organizations, consultants and newsletters.
The Ethics Resource Center is a nonprofit, nonpartisan educational organization. Offers free email subscription to “Ethics Today” newsletter
The Society of Corporate Compliance and Ethics is an international non-profit organization for business professionals working in the compliance and ethics field. Offers free subscription to “E-Corporate Compliance News”.
The Center for Ethical Business Cultures assists leaders in creating ethical and profitable business cultures at the enterprise, community and global levels. Website contains links to other business ethics resources.
The Josephson Institute of Ethics advocates principled reasoning and ethical decision making.
Information from the Small Business Administration. Learn how to develop a company ethics policy and take an integrity self-test to determine your level of honesty.
Link to “A Complete Guide to Ethics Management – an Ethics Toolkit for Managers”.
Link to “Creating a Code of Ethics for your Organization”.
An extensive list of links to business ethics resources