Annual Sales

Lisa Jennings thought that at long last, her company, Assurance Technologies, was about to win a major contract from Sealgood Instruments. Sealgood, a maker of precision measuring instruments, was sourcing a large contract for component subassemblies. The contract that Assurance Technologies was bidding on was worth at least $2.5 million annually, a significant amount given Assurance’s annual sales of $30 million. Her team had spent hundreds of hours preparing the quotation and felt they could meet Sealgood’s requirements in quality, cost, delivery, part standardization, and simplification. In fact, Lisa had never been more confident about a quote meeting the demanding requirements of a potential customer.

Troy Smyrna, the buyer at Sealgood Instruments responsible for awarding this con- tract, called Lisa and asked to meet with her at his office to discuss the specifics of the contract. When she arrived, Lisa soon realized that the conversation was not going exactly as she had expected. Troy informed Lisa that Assurance Technologies had indeed prepared a solid quotation for the contract. However, when he visited Assurance’s facility earlier on a prequalifying visit, he was disturbed to see a significant amount of a competitor’s product being used by Assurance. Troy explained his uneasiness with releasing part plans and designs to a company that clearly had involvement with a competitor. When Lisa asked what Assurance could do to minimize his uneasiness, Troy replied that he would be more comfortable if Assurance no longer used the competitor’s equipment and used Sealgood’s equipment instead. Lisa responded that this would mean replacing several hundred thousand dollars worth of equipment. Unfazed, Troy simply asked her whether or not she wanted the business. Lisa responded that she needed some time to think and that she would get back to Troy in a day or so.

Assignment

1. Do you think the buyer at Sealgood Instruments, Troy Smyrna, is practicing unethical behavior? First, what is the term for this behavior, and second, defend why you think it is ethical or unethical behavior.
2. What should Lisa do in this situation? Formulate a response