Posted at 12.14.2018
This examination will first add a brief introduction of a fictitious satellite imaging company, International Satellite television Images (ISI), referred to in Case 3 of "Strategic Management and Business Plan, " and the role ISI performs in business ethics. Second of all, an research will be given as two different scenarios that derive different outcomes. Lastly, a suggestion will be given based on the results I really believe would be most beneficial for company.
ISI is along the way of creating a new imaging dish with the capacity of clear images within one meter. 150 percent of funding must be anchored by ISI to complete the project. It will require $200 million to release and build the satellite. Personal bankruptcy will be submitted by the company if ISI is unable to secure funding during the release process. Industry competition includes four nations: United States, France, Russia and Israel. The U. S. has the lead in technology regarding satellite television image quality. The U. S. centered companies are Lockart, Global Sciences and ISI. At ISI, Jim Willis is the Vice Leader of marketing and sales and Fred Ballard is the company's President.
The new technology that ISI is developing includes a thermal stabilizer for the satellite's camera that a subcontractor is creating. The subcontractor cases they are delayed-pushing ISI's release particular date out another 12 to 18 months. ISI's competitors claim to be within the 6 month screen of ISI's primary published launch night out. Each of the U. S. based companies modified their launch times at least once if not double. In so doing it changes the conditions of the contract and creates further international deal negotiations leading to possible termination of contract. After learning these details, Fred Ballard thinks the his customers already expect delays and disregards Jim Willis' source on the problem extending the kick off date.
ISI became apprised of any Japanese company, known as Higashi Trading Company (HTC), that is in a 6 month negotiation with ISI regarding a $10 million per yr contract. Willis believes that ISI's prior understanding of the launch delay because of the thermal stabilizer and not the genuine spacecraft could damage the relationship with HTC and lose their deal.
Because the satellite imagery industry is quickly growing, all members have to keep their current clients to have the ability to take part. Companies in this industry also need opportunity capitalists to funding projects. The negotiations with HTC has generated duress for Jim getting him to the point of whether to act ethically or unethically-in favor of his company.
1. What exactly are resources of the factors, that have created the honest dilemma? There are several internal and external forces at the job here.
Internal causes include:
Jim Willis' boss, Frank Ballard, has given Jim a specific instruction not to disclose the information. the company code of conduct does not permit the disclosure of company proprietary information without previous approval. the financial health of the business could be jeopardized. Jim Willis' personal financial well being could be jeopardized.
External pushes include:
2. Could it be ever appropriate to withhold negative information from your client?
The answer is, it depends. Potential issues with production, delivery, and maintenance happen all the time. Most of these problems are solved without any customer impact. It is neither successful, nor fair to bring all of these problems to the customer's attention. However, when a known problem gets the likelihood of possessing a severe negative effect on a customer, it is the company's responsibility to disclose this information. Numerous illustrations in the buyer world are testaments to the effect of failure to reveal. Ford Pinto gas tanks and Firestone auto tires (Miller, 2000) experienced serious negative effects customer. Situations like Tylenol (Stevenson, 1986) claim that early disclosure can actually improve customer belief and loyalty.
3. What should ISI do?
As the epilog illustrates, the customer was savvy enough to provide safe guards against industry practice and the offer did not proceed through until much later than planned. While there is no information concerning whether or not the same buying delay could have happened if Jim Willis acquired disclosed the info in advance of the negotiations, it was clear that the level of trust between your parties was suprisingly low since the Japan insisted upon conclusion guarantees.
Therefore, it can be surmised that in cases like this, disclosure might well have afforded both parties the possibility to work more tightly together and in the long run helped ISI to close the agreement earlier, on better terms. Therefore, in cases like this, ISI should either have disclosed the negative information or delayed negotiations.
In the genuine case, the day was not primarily disclosed to the client. However, the client insisted that if the unveiling date was missed, the customer acquired the right to renegotiate the terms of the contract or void it all together. Further, the customer insisted that any ISI software purchased by the customer would be fully refundable if the satellite television did not start within half a year of the introduction date. Under these situations, ISI was compelled to reveal that the launch date was in jeopardy. At that point, contract discussions were suspended for greater than a year. Other potential agreements were also placed on hold. Although agreements were finally negotiated, it had not been until after ISI went through bankruptcy and reorganization. Neither Jim Willis nor Fred Ballard was with ISI when the satellite tv finally launched. The particular launch occurred five years after the original launch time frame. As Fred Ballard possessed predicted, all competitor launch times were similarly delayed.
In 2004, the government announced its motive to get commercial satellite tv imagery value over $500, 000, 000. The deal would account the production and launch of a new spacecraft. Imagery quality would be less than. 5 meters. The leading contender for the contact joined one-on-one negotiations with the US government. Discussions broke off following the two sides didn't iron out financial conditions and negotiate a "realistic" launch date. The satellite company got provided a introduction day that they assumed was reasonable but which fell beyond the program the government organization requested. Skillfully developed knew the federal government agency's launch particular date request was not realistic.
ISI got just surfaced from bankruptcy security and had launched its first high-resolution satellite tv (which experienced sensor problems and was struggling to deliver organized image quality). Even though ISI was the weakest contender for the deal, they were awarded the contract. These were awarded the contract generally because they arranged "comply" to the federal government spy companies required launch particular date.
The question of ethics remains. One company truthful in its bet for the contract disclosed that it could not make the required launch particular date - they lost the deal. The other company decided to the launch day requested in the contract though it is extremely unlikely that they would be able to build and kick off the satellite on time, and won the agreement.
Less than half a year after the contract award the winning company purchased the other company. ISI's satellite television is believed to be behind timetable.
Lying will breach their shared trust, and also might increase risk of their goals during this deal i. e. hurried accomplishments.
If ISI wanted income over ethics, twenty years ago, that may have worked due to limited market competition. Nowadays, ISI must consider that even though short term income are gained, long-term interactions also build even more earnings. With a lie, this will destroy those opportunities for long term commitments and lead to loss of potential future capital. ISI needs to focus long term, especially with their industry criteria.
Disclose the actual fact talking about delay time, approaching a revised proposal with possible time length and being more centered on the thermal stabilizer and other technological factors attained by subcontractors.
(Cox, 2008)Cox. (2008, June 17). Case study: Misleading satellite television data deal. Retrieved February 13, 2017.
(Ward, 2010) Ward, L. (2010, August 25). The Evolution WITH THE U. S. Commercial Remote control Sensing Space Plan. (11).
(Wheelen, 2015) Wheelen, T. (2015). Strategic Management and Business Insurance policy (14th ed. ). Pearson.