San Taco Steel Corporation - Adms 3660
San Taco Steel Corporation
By: Adam Karoly
Student No.:
Telephone:
1) The key problem in this case is whether Frank Ciccoloni, working on behalf of San Taco Steel Corp. (STSC), should donate money to Gemara Fabricating’s (Gemara) annual sales meeting, effectively bribing them into staying as a client. There are three reasons why this is such an issue. First off, company policy and Frank’s policy as well is to not give large donations to customers. Giving the money would be going against the fabric of what the company stands by. Second, due to the competitive nature of the industry, there is a strong likelihood that another company will give the money and potentially steal Gemara as a customer. Giving the money to Gemara would be STSC’s way of influencing Gemara to stay with them as a client. Finally, while this was once an accepted business practice in the 50s and 60s, laws such as the Omnibus Act have come into effect preventing companies from “wining and dining” their clients into staying with them.
2) George Ciccoloni is a primary stakeholder in this case. He believes very strongly in keeping his word. Part of what he preaches to his workers is to always keep your word, no matter what. If he agrees on the phone to Gemara to donate at least $5,000 to their annual sales meeting, then he would be showing to his employees that his word is not as sacred as he preaches. The entire infrastructure of the company, with regards to delivering something on time or keeping promises with a customer, will not be treated with the same level of respect as it was in the past. If Frank does not keep his word, neither will his employees.
STSC is also a primary stakeholder. Giving a donation of any kind to Gemara will not only be bad for business, but also in the market. As mentioned in the case, there are customers who will buy from a company based on the price and there are those who will buy based on comfort and familiarity with their supplier. STSC, by giving the money to
By: Adam Karoly
Student No.:
Telephone:
1) The key problem in this case is whether Frank Ciccoloni, working on behalf of San Taco Steel Corp. (STSC), should donate money to Gemara Fabricating’s (Gemara) annual sales meeting, effectively bribing them into staying as a client. There are three reasons why this is such an issue. First off, company policy and Frank’s policy as well is to not give large donations to customers. Giving the money would be going against the fabric of what the company stands by. Second, due to the competitive nature of the industry, there is a strong likelihood that another company will give the money and potentially steal Gemara as a customer. Giving the money to Gemara would be STSC’s way of influencing Gemara to stay with them as a client. Finally, while this was once an accepted business practice in the 50s and 60s, laws such as the Omnibus Act have come into effect preventing companies from “wining and dining” their clients into staying with them.
2) George Ciccoloni is a primary stakeholder in this case. He believes very strongly in keeping his word. Part of what he preaches to his workers is to always keep your word, no matter what. If he agrees on the phone to Gemara to donate at least $5,000 to their annual sales meeting, then he would be showing to his employees that his word is not as sacred as he preaches. The entire infrastructure of the company, with regards to delivering something on time or keeping promises with a customer, will not be treated with the same level of respect as it was in the past. If Frank does not keep his word, neither will his employees.
STSC is also a primary stakeholder. Giving a donation of any kind to Gemara will not only be bad for business, but also in the market. As mentioned in the case, there are customers who will buy from a company based on the price and there are those who will buy based on comfort and familiarity with their supplier. STSC, by giving the money to