Assignment Detail

These sales expectations are in place because Avery’s company is trying to go public (IPO). In order to do so, they must be profitable for five quarters in a row. Therefore, there is enormous pressure from the company’s investors and board to meet the assigned sales goals.

As the end of the fifth quarter approaches, Avery realizes she is one sale short of reaching her goal. When she approaches her manager to let him know that she will not be meeting her goals, he explains to her a way to get around the problem. He tells her that when he was a sales engineer, he would approach customers who he knew would soon be purchasing a system. He would get the customer to place the order and receive a price discount if they come to the factory, be shown an empty shell of a system that was not yet built, and sign paperwork documenting their acceptance of the unbuilt system as if it was already built. That way the order could count as part of this quarter’s profits, but the customer would not have to pay for the order until the next quarter.

Avery’s manager explains that although this practice of falsifying sales reports is now illegal, when he was a salesperson the practice was a common way of meeting sales goals. Additionally, he suggests to Avery that he would look the other way if she were to falsify a customer acceptance report and reminds her that the company will only be able to go public if she meets her sales goal. If she fails to meet her goal, the IPO will be postponed at least a year and so will her IPO profits and the profits of all the other employees and shareholders.

Questions:

1. What is the ethical dilemma?
2. Identify ONE primary and ONE secondary stakeholder who might be affected.
3. Assess the implication of each alternative available to Avery.
4. If you were Avery, what would be your decision/action?
5. Highlight at least one ethical theory, and explain how it supports/influences your choice of decision/action.