Scaffold Plank
Dianne Estrada
Management Strategy
Kucinski
September 9, 2010
THE SCAFFOLD PLANK INCIDENT
OVERVIEW
Bob Hopkins, a previous banker, accepted a “trader” position with White Lumber, who was one of the bank’s best accounts. John White, the owner of White Lumber, was a director at the bank Bob previously worked for and a leading citizen in the community. The “trader” position Bob accepted involved buying and selling lumber. Bob’s compensation was incentive-based without a salary cap. The ethical dilemma Bob faces in this case is a transaction that makes Bob question his and the company’s ethics and legal obligations. It’s February, business was slow, the company was $5,000 below their breakeven point, and it appeared as if a recession was on the horizon. Bob receives a call from Stan Parrish, a buyer at Quality Lumber, for a large order of lumber. Bob has four additional inquiries for the same amount of lumber, but for scaffold plank. Bob becomes concerned whether the order that was called in by Stan is suppose to be for scaffold plank. Bob addresses his concerns with his partner, Mike Fayerweather, who doesn’t think there is a problem because Stan did not specifically ask for scaffold plank nor did Bob quote him for it. Mike also advises Bob that if Stan is bidding for a job he will win because his order is less expensive than scaffold plank. Bob suggests that he calls Stan to verify if the order needs to be for scaffold plank, but Mike advises against calling because it could harm the business relationship. It may also appear as if Bob is accusing Stan of being unethical. Mike also points out that if their company had knowledge that the material will be used for scaffolding then they would be legally liable as well. Against Mike’s advice, Bob calls Stan and discovers that the lumber will be used as scaffold plank. Bob notifies Stan that the lumber does not meet the requirements and that he doesn’t feel comfortable with the situation. Stan states that he
Management Strategy
Kucinski
September 9, 2010
THE SCAFFOLD PLANK INCIDENT
OVERVIEW
Bob Hopkins, a previous banker, accepted a “trader” position with White Lumber, who was one of the bank’s best accounts. John White, the owner of White Lumber, was a director at the bank Bob previously worked for and a leading citizen in the community. The “trader” position Bob accepted involved buying and selling lumber. Bob’s compensation was incentive-based without a salary cap. The ethical dilemma Bob faces in this case is a transaction that makes Bob question his and the company’s ethics and legal obligations. It’s February, business was slow, the company was $5,000 below their breakeven point, and it appeared as if a recession was on the horizon. Bob receives a call from Stan Parrish, a buyer at Quality Lumber, for a large order of lumber. Bob has four additional inquiries for the same amount of lumber, but for scaffold plank. Bob becomes concerned whether the order that was called in by Stan is suppose to be for scaffold plank. Bob addresses his concerns with his partner, Mike Fayerweather, who doesn’t think there is a problem because Stan did not specifically ask for scaffold plank nor did Bob quote him for it. Mike also advises Bob that if Stan is bidding for a job he will win because his order is less expensive than scaffold plank. Bob suggests that he calls Stan to verify if the order needs to be for scaffold plank, but Mike advises against calling because it could harm the business relationship. It may also appear as if Bob is accusing Stan of being unethical. Mike also points out that if their company had knowledge that the material will be used for scaffolding then they would be legally liable as well. Against Mike’s advice, Bob calls Stan and discovers that the lumber will be used as scaffold plank. Bob notifies Stan that the lumber does not meet the requirements and that he doesn’t feel comfortable with the situation. Stan states that he