Naina Jagesha Roll No-2011055

MMS -Finance

Case study3 The Fitzgerald Machine Company a. What are the relevant facts of the case? 1. Don Bradish was recently hired to address problems with meeting scheduled delivery dates. 2. Don has not yet learned enough about the organizations systems to make recommendations 3. The purchaser of a very large order asked that the scheduled shipment be delayed. 4. Don and his boss Jane agreed to the customers request, but because of the orders size they had to secure the customers promise to pay on the time schedule originally contracted. 5. On the originally scheduled shipping date, Don found out that the order would not be ready to ship for at least one more week. 6. Jane actually sent the bill to the customer as agreed and asked Don to negotiate a storage fee in addition.

b. What Are the Ethical Issues? 1. What are the companys responsibilities to a customer regarding payments for an order not yet completed? 2. Does the company have the right to negotiate extra charges on an agreement already in place? 3. On an individual level, should Don tell Jane that the order is at least one week late? c. Who Are the Primary Stakeholders? Don Bradish Jane Fitzgerald The customer requesting the delay The stockholders of the Fitzgerald Machine Company

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Naina Jagesha Roll No-2011055

MMS -Finance

d. What Are the Possible Alternatives? 1. Don could tell Jane about the delay immediately. 2. Don could suggest that he talk with the customer and see what he can negotiate. 3. Don could suggest that Jane issue a credit for the bill until the order is ready for shipment.

e.

What Are the Ethics of the Alternatives? Ask questions based on the utilitarian perspective (costs and benefits). For example: 1. Which alternative benefits the most stakeholders? 2. How would you measure costs in this vignette? Benefits? 3. Do the benefits which accrue to Don and the Fitzgerald Company offset the potential costs to the customer? Ask questions based on the rights perspective. For example: 1. Does the customer have a right to know about the missed deadline? Does Jane have a right to know about the missed deadline? Does Don have the right to withhold information from Jane? Do the stockholders of Fitzgerald have the right to know about any of these activities? 2. Whose rights are addressed by each of the alternatives? Ask questions based on the justice perspective (benefits and burdens). For example: 1. How fairly does each of the alternatives balance the benefits arid burdens among the various stakeholders? 2. Which stakeholders bear the most burdens if Don withholds information from Jane?

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Naina Jagesha Roll No-2011055

MMS -Finance

Case study-4 Incredible Shrinking Potato Chip Package

a. What Are the Relevant Facts? 1. Due to a 25 percent increase in raw potato prices, Julie, a potato chip brand manager, would need to raise her potato chip prices about 15 percent in order to maintain margins of 5 percent. This would necessitate a price hike of $.24 on the most popular 7.5 oz. size. 2. Julie is evaluated solely on the basis of monthly profits. 3. Historical data shows that downsizing, i.e., holding price constant while decreasing net weight, is a popular strategy in Julies industry as well as in other packaged goods industries. 4. Julie fears that raising the price to cover the increased cost would incur the bad will of her loyal customers, who would view the price hike as unfair. 5. Julie is worried that competitors might maintain their prices and incur a short-run loss. 6. Past industry data indicates that buyers might not notice a package size reduction. 7. Julie believes that consumers dont usually examine the net weight label on subsequent purchases. 8. Julies boss, Dave, the Marketing Director, indicated that downsizing is a very common practice in this and other packaged goods industries. 9. According to Dave, downsizing marketers are aboveboard in clearly labeling products regarding weight, serving size, price, and quantity.

b. What Are the Ethical Issues? 1. Are consumers deceived, i.e., misled, by [downsizing]? 2. What is the marketers duty to inform customers about price and size changes? 3. Should it be the buyers responsibility to check weight, price, quantity, and serving size? 4. How can Julie compete if most or all of her competitors downsize their products? 5. How can Julie achieve an acceptable balance between her need to make a profit for her company and herself and her need to maintain the trust and fair treatment of her customers? 6. What constitutes fair treatment of customers regarding significant price hikes? 7. Is it proper to downsize if many others in the industry are doing it?

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Naina Jagesha Roll No-2011055

MMS -Finance

c. Who Are the Primary Stakeholders? Julie Dave All of Julies customers Stockholders in the company Julies competitors d. What Are the Possible Alternatives? 1. Raise the prices to cover the increased costs. 2. Downsize the product so as to maintain margins. 3. Maintain the price and incur a short-run loss. 4. Accept a smaller than 5 percent margin by either raising the price slightly and/or downsizing the product slightly. 5. Suggest flagging the package with reduce, or some similar wording, for six months following the downsizing.

e. What Are the Ethics of the Alternatives? Ask questions based on a utilitarian perspective (costs and benefits). For example: 1. Which possible alternative would provide the greatest benefit to the greatest number? 2. How would costs be measured in this vignette? How does one quantify potential loss of customer goodwill? 3. Do the benefits of maintaining profits outweigh the costs of losing customer goodwill? Ask questions based on a rights perspective. For example: 1. What does each stakeholder have the right to expect? Ask questions based on a justice perspective. For example: 1. Which alternative distributes the benefits and burdens most fairly among the stakeholders? 2. Which stakeholders carry the greatest burden if Julie decides to downsize? 3. Which alternatives demonstrate a fair process? Fair outcomes?

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Naina Jagesha Roll No-2011055

MMS -Finance

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