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Case Study General Managment Principles

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Submitted By jholliday
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Case Study #1
Honor the Cost of Philanthropy

I believe that there are many scenarios and situations in business that require flexing the rules occasionally. The executive that is handling the Bosnia contract has done what he needs to do to ensure that his company delivers the product as promised. But, with such a small net profit on the kits, it leaves you to wonder just how much free flowing cash is going into each truck? Who is tracking the money? Who decides what the correct amount is? I would approach the executive and discuss the full ramifications of what he is doing and get his side of the story before making any decisions but there may be long term political or legal ramifications to both of your decisions.
You must look at the cost ramifications within this transaction. Will it end up costing the corporation money in the long run to continue delivering the kits? If the kits only yield a small profit for the company, than a decision must be made of what is more important to the executive and the company. Does he continue to provide much needed medicine to the people of Bosnia or possibly risk the lives of their truck drivers as well as the individuals who require that medicine?

The Militia is another variable within this scenario. In the future they may raise the cost of admission between each checkpoint and that will put the executive in charge in a very challenging situation. Before moving forward initially, the executive would have had to do some research regarding the amount that was given to each driver to pass through each checkpoint. If you were that executive, how do you decide how much is enough to provide each driver? Was this dollar amount initially discussed during negotiations for the contract? What if they begin to kill drivers no matter how much they are paid? The blood of those fallen men would be on that executive’s hand who decided to move forward with the contract and share the details no one.
Long term political ramifications may fall on this company’s reputation if this information is ever released. This company may be branded in the media as condoning the treatment by the Militia in Bosnia and condoning their behavior since they are going along with it. The company’s clients may pull out of deals and stop working with them all together. If the media gets involved and gains access to the company’s records, they could create a media spectacle at the company’s expense and forever tarnish the company’s name.
From a moral standpoint, you have to consider all outcomes when making your decision to draft the report or turn a blind eye. The kits may contain crucial medicines that are required for the people of Bosnia to survive the terror that they are facing. If the executive is exposed and the company stops delivering the kits, people may become very ill or even die. Research must be done to explore other delivery techniques before stopping the current delivery strategy. If the kits could be air lifted in, that would alleviate the cost of the drivers, payoffs, and risk.

Lastly, the money must be provided by someone within the companies accounting department. The case study did not specify where exactly the money is coming from to fund the driver’s safety. I would have to believe that the money is coming from the corporation itself and not from the executives own pocket. If that is true, there are more parties involved that originally discussed. You may not be exposing just the executive, but many of your fellow co-workers.
I believe that in the long term it makes more sense from the business perspective, to report the “Bosnia contract” to the executive’s leadership. Although currently the contract may be working as planned, I feel there are too many variables that are not within the company’s control. This contract could go south very quickly and the company may not have enough time to adjust. I also believe that the contract has value to the people of Bosnia and for that I would spend time to evaluate other options to continue delivering the kits without putting the company’s reputation at risk.

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