Purpose of the report
The purpose of the report is firstly, to give an introduction of the satellite company described in the case and the concept of business ethics which are of great importance in today’s business world. Secondly, we will analyze the case presenting two alternatives which could lead to different behaviors and outcomes. Finally, we will provide a recommendation how the key person should act in the described situation from our point of view.
Analysis summary of the case
The ethical problem is caused by various factors. On the one hand, the satellite imagery industry is a highly attractive and fast-growing market, so all participating companies heavily rely on acquiring and keeping their clients to be able to compete. On the other hand, all companies depend on venture capitalists who provide the financial means for the companies’ projects. Due to current negotiations with a Japanese client, Jim has to decide of whether to act ethically correct or rather in favor of the company.
According to scenario 1, Jim discloses the information about the delayed completion date. Consequently, further negotiations with the Japanese would be cancelled and the advance contract would be made with a competitive company.
The second alternative, described as scenario 2, would be to withhold the information from the customer. As a major consequence, ISI would probably get the contract and the financial future of company would be secured for the moment. As possible negative consequences, the company's reputation could be damaged and possible contract conditions could result in compensation claims of the Japanese company. However, the company is prepared to take this risk than to lose the contract to one of ISI’s competitors. In the best case, the contract will be signed and the delay will be tolerated.
It is recommended that ISI should conceal the delay of the launch date and to use the published one. By doing so, the company will be secured at the moment, which is the most important thing as far as we concerned. 1.
As to better understand the role of ethical values in today’s business world, a fictitious company serves as an example to illustrate the ethical dilemma in the presented case study. International Satellite Images (ISI) is an internationally operating company, which has its headquarters in the United States. The company produces various types of commercial satellites and is primarily specializing in building satellites with a highly fine resolution. A new satellite which is able to image the world at a resolution of one meter will soon be built and launched. The satellite imaging industry is dominated by only few companies from four nations, the United States, Russia, France and Israel. Within the United States, ISI is one of the leading firms, besides its national competitors Lockart and Global Sciences. Each of the US companies had received a license from the US government to produce and launch satellites. For the last six months, ISI had been negotiating with a Japanese company an annual imagery purchase of ten million dollars for five years and ISI is currently close to get the contract. However, the two competitors had also shown interest to do business with the Japanese and therefore put the expected deal to risk. 1.2
Jim Willis, the Vice President of Marketing and Sales for ISI, is the key person in the ethical dilemma described in the case study. He is responsible for the code of conduct applicable for the negotiations with the Japanese company HTC (see below). Withholding negative information from business partners, for instance publishing an incorrect launch date to increase the probability to make a successful deal, seems highly unethical to Jim. He feels that this behavior is not complying with his ethical values and he is worried about the consequences this practice could have on his personal...
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