Rein Chemical Company Case

Who should do? What? When?Why?

Describe your assumptions

This case describes the main issues of Business Ethics on pricing malpractice. The interesting thing is the perspectives provided by each departmental manager. The main challenge is how the general management, in this case Anthony Garrison, of Rein Chemical will deal with this ethical problem.

Business Context:

Decentralize operations: each unit as profit center

Units located geographically dispersed making communication more difficult (incident was investigated by two personnel, delaying the uncover by a month after the letter was sent by the customer).

Disalignment between the employees behaviours and the code of conduct in the company (Mr. Garrison expressed that this is not the kind of behavior that his company condonces).

502M in revenue

Specialty chemicals involved in the pricing malpractice (22% of total sales)

Assumptions:

Improper pricing

Large # of customers

Unclear who the affected parties were

Any course of action taken will affect the innocent parties involved in the transactions. Which action should be taken then?

Options:

* Leave as is

* Garrison to delegate to Hoffman since his team is the one affected by it.

* Regardless if this is delegated or take responsibility, the company should:

-Deal with the ethical issue directly (deal with the one by one customers complaints, or respond to the thousands of accounts by informing about the incident, reimburse the overcharge).

- The management should take full responsibility of the pricing malpractice since this incident occurred on their watch.

Anthony Garrison should influence the management to handle this crisis by reaching out to the customers and acknowledge the pricing malpractice and provide a discount on next order on the difference of the overcharges.

First the risk assessment should be plan with contingency plan on customer reactions, frequently asked questions preparation, crisis response team dedicated...