BUSINESS MEETING OR PAID-FOR VACATION?
For the last several years, Amberson Corporation has made occasional purchases of software packages from Hacker, Inc., a corporation located in Maui, Hawaii. Hacker produces a high-quality product. However, Hacker’s product is generally more expensive than that of its competitors. Hacker has continued to press Amberson for business, because Amberson is very large and an industry leader.
Contrary to general practice in the software business, Hacker holds an annual four-day meeting in late February for important (and potentially important) customers at a popular local resort. Hacker’s competitors complain that “these junkets are unfair and corrupt the purchasing process” Hacker argues that it uses this conference to explain its products and services and to learn more about the needs of its clients. A substantial amount of time is allocated for golf, swimming, scuba, and rest and relaxation. All expenses (exclusive of transportation costs) are paid for by Hacker.
Amberson is reexamining many of its business practices, and the policy of allowing corporate officials to attend the Hacker seminar has come under scrutiny. Amberson is examining whether to should discontinue any attendance at the Hacker meetrings and further whether it should establish a corporate-wide policy against accepting any gifts from customers or suppliers.
Answer the following questions:
1) Who/What are the affected stakeholders?
2) What are the ethical issues and the possible alternative courses of action for Amberson?
3) What are the practical constraints on the alternative courses of action that you chose?
4) You are the Corporate Governance Officer of Amberson. What would you do?