The Propmore Corporation Case
This case was developed by Dr. Peter Madsen and Dr. John Flaming. Arthur Andersen & Co. SC thanks the authors for their contributions to the Business Ethics Program. Dr. Madsen is the Executive Director and Senior Lecturer at the Center for Advancement of Applied Ethics, Carnegie Mellon University. Dr. Flaming is a Professor of Management at the University of Southern California. Arthur Andersen & Co, SC also thanks Mr. Harry Goem, Vice President of Procurement for Alcoa, for his input and thoughtful reviews. Arthur Andersen & Co, SC has sponsored and funded this project to promote discussion and awareness of ethical issues arising in the business world. Arthur Andersen & Co, SC takes no positions and expresses no views with respect to the myriad of ethical issues reflected in this case but hopes that users will facilitate and promote a dialogue on these important issues. ©1991 ARTHUR ANDERSEN & CO. SC
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Don Bradford was on the fast track at the Propmore Corporation. But he wished he could slow things down a bit, given several hard choices he had to make. Propmore Corporation was a good place to work. It had sales of about $500 million per year, a net profit margin of 5 percent, and a return on equity of 15 percent. Propmore made several key components used by the aerospace industry and consumer goods market. It was a leader in its field. The company was organized by product divisions, each reporting to the Executive Vice-President. Its operations were decentralized, with broad decision- making capability at the divisional level. However, at the corporate level functional departments (Purchasing, R&D, Personnel, and Marketing) set company policy and coordinated divisional activities in these areas. Propmore was financially successful, and it treated its people well, as Don Bradford’s experience showed. After earning his MBA four years ago from a respected state university, Don quickly rose through the ranks in Purchasing. At age 31, he holds the prestigious position of Manager. (See organizational chart.) Before joining Propmore, Don earned a B.S. in engineering and worked for three years in the aerospace industry as a design engineer. During his first three years at Propmore, Don was a buyer and received “excellent” ratings in all his performance appraisals. As Purchasing Manager, Don enjoyed good working relationships with superiors and subordinates. He was accountable directly to the Division General Manager and, functionally, to the Corporate Vice-President of Procurement, Mr. Stewart. His dealings with these people were always amiable and he came to count upon them for technical guidance, as he learned the role of Divisional Purchasing Manager. Don had several staff assistants who knew the business of buying and were loyal employees. He had done a good job of handling the resentment of those passed over by his promotion to manager, and he had developed a good deal of trust with the buying staff. At least he thought he had-until Jane Thompson presented him with the first in a series of dilemmas.
Jane Thompson, age 34, had been with Propmore for ten years. She had a B.A. in English Literature and two years experience as a material expediter before coming to Propmore. Initially hired as a purchasing assistant, Jane became a buyer after two years. She enjoyed her job and the people she worked with at Propmore. In four years of working with Don, Jane had come to admire and respect his approach to management. She appreciated his sensitive yet strong leadership and saw him as an honest person who could be trusted to look after the interests of his subordinates.
But the dilemma with which Jane now presented Don made him wonder whether he had the skill to be a manager in a major division.
A Luncheon Harassment
After a two hour purchasing meeting in...