Ethics Training in action

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In a previous lesson you made recommendations for XYZ Inc. with respect to the creation of an Ethics Officer and Code of Ethics. Given the same set of facts, although now with the Ethics Officer and Code of Ethics in place, you will need to recommend a comprehensive education program designed to teach and reinforce critical knowledge, skills and abilities that will promote the changes in organizational culture that had developed around the issue of “over selling”.

In creating this approach to infusing ethics into the XYZ culture, you must use ideas from at least three different chapters from the Sekerka text assigned for this particular lesson (Chapters 4, 7-10 & 15). You should also use whatever other materials we have studied this semester to help explain your approach.

In supporting your recommendations, use appropriate APA citations.

For your reference, the following are the facts which you must consider in making this set of recommendations.

XYZ corporation produces circuit boards for cell phones and related communication products. Its fabrication plants exist in two U.S. locations – Phoenix, Arizona, and Harrisburg, Pennsylvania – but its supply chain extends to three continents. At this point XYZ has 835 employees at its fabrication locations, and 35 additional sales and purchasing staff supervised from an office in Chicago. The 23 members of the sales staff are dispersed across three continents, while purchasing staff reside in Chicago. Most of those in overseas locations are home country nationals, the majority in China and India.

In recent years the company has confronted a number of problems involving “over selling’”. Sales staff, working on individual commissions that often result in $300,000 incomes frequently promise product to customers that is outside the company’s ability to provide. In a recent case two sales staff teamed to sell 750,000 units to a customer in Europe. It was clear to them at the time that the company would not be able to fulfill the contract in the time frame the customer demanded; however, when questioned by the VP the staff said that, “In the past we have always operated this way, in fact we were told to operate this way, and the company would either find a way to make it happen or negotiate different terms with the customer at the point when it was clear we couldn’t make it happen.”

In truth, their assertion was correct. The company had frequently played this game with production staff and customers. The result was certainly discomforting to production employees, who found that production schedules placed significant burdens on their personal lives given the involuntary overtime required by the promises. In addition, customers seldom could find other alternative sources for the product given the patents XYZ had created and will maintain for the next 15 years. Consequently, the company had lost little business over the long run by allowing these sales practices, which everyone understood to be dishonest.

Company profits have always been above average for comparable firms in the industry, and shareholder satisfaction with company management – measured by an independent research firm – is at an historic high.

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