Becky Knauer Ethical Decision

Becky Knauer recently resigned from her position as controller for Shamalay Automotive, a small, struggling foreign car dealer in Upper Saddle River, New Jersey. Becky has just started a new job as controller for Mueller Imports, a much larger dealer for the same car manufacturer. Demand for this particular make of car is exploding, and the manufacturer cannot produce enough to satisfy demand. The manufacturer’s regional sales managers are each given a certain number of cars. Each sales manager then decides how to divide the cars among the independently owned dealerships in the region. Because of high demand for these cars, dealerships all want to receive as many cars as they can from the regional sales manager.

Becky’s former employer, Shamalay Automotive, receives only about 25 cars a month. Consequently, Shamalay was not very profitable.

Becky is surprised to learn that her new employer, Mueller Imports, receives over 200 cars a month. Becky soon gets another surprise. Every couple of months, a local jeweler bills the dealer $5,000 for “miscellaneous services.” Franz Mueller, the owner of the dealership, personally approves payment of these invoices, noting that each invoice is a “selling expense.” From casual conversations with a salesperson, Becky learns that Mueller frequently gives Rolex watches to the manufacturer’s regional sales manager and other sales executives. Before talking to anyone about this, Becky decides to work through her ethical dilemma.

The ethical issue is that the owner is bribing the regional sales representatives in order to get more cars and thusly boosting sales.

b) In my opinion it is highly unethical and illegal. The owner is trying to gain a competitive advantage through bribery.

c) The consequences could be civil and/or criminal action against Mueller Imports, its owners, the regional sales representatives, and the manufacturer of the cars. Not only that, the manufacturer could suffer the degradation of its brand name from the press that a case like this would generate.

d) This is a difficult situation, because if you inform the owner of the illegality of the situation you will probably loose your job; but it needs to be reported. I myself would seek private legal advice for my protection. I would then start looking for a new job. On the advice of council I would notify the manufacturer the particulars of what I perceive is going on, I am sure that most manufacturers have policies against sales people taking gifts from customers in order to avoid the appearance of impropriety. Also, on the advice of council I would notify the appropriate civil authorities. Bearing in mind that this could permanently damage my career.