Ethics Activity – Hardee Industrial Supplies, Inc.

Ethics Activity – Hardee Industrial Supplies, Inc.

This writing assignment is a brief case relating to a questionable business situation.  You are required to summarize the ethical issues, determine which parts of the IMA code of ethics apply, and suggest a course of action.

Hardee Industrial Supplies, Inc.

Certification of a new vendor

Characters:        John, Purchasing Agent for Hardee’s electrical products division

Mia, Assistant Financial Analyst for Hardee’s electrical products division and CMA

Ted, Chief Financial Officer for Hardee

Steve, Owner of Light Manufacturing

Hardee Industrial Supplies distributes a wide variety of mechanical, electrical and plumbing devices to its commercial customers.  It is Hardee’s policy to carefully select vendors from which it purchases the products it sells.  The certification process can be lengthy and expensive.  Consequently, replacing an existing vendor with a new one is only done if there are significant differences in price, quality, etc.

Steve, the owner of Light Manufacturing, has contacted John, the purchasing agent for Hardee’s electrical products division about the potential to become certified as one of Hardee’s preferred vendors.  Light Manufacturing produces a variety of electrical switches and has tried in the past to become one of Hardee’s preferred vendors, but has failed the certification process because of concerns about their ability to deliver on a reliable basis.  Steve is desperate to gain Hardee’s business.  Without their business, Light Manufacturing may be forced into bankruptcy.

John is eager to help Steve because several of John’s relatives work at Light Manufacturing and may lose their jobs is Light declares bankruptcy.  John has agreed to help Steve if Steve pays John a “commission” on any sales Light Manufacturing makes to Hardee.  John cannot recommend Light Manufacturing for preferred vendor status without first doing a detailed analysis of the costs and benefits of having Light Manufacturing as a vendor.  That analysis must be prepared by one of Hardee’s financial analysts.

John has approached Mia, a respected and experienced financial analyst in Hardee’s electrical products division to do the analysis.  Mia is close to retirement, but is concerned about her ability to be financially secure in retirement.  John knows of Mia’s concerns and offers her a proposal to strengthen her financial position.  John has offered to share his “commission” with Mia if she will present a very favorable picture of Light Manufacturing to Hardee’s executives and Light Manufacturing receives preferred vendor status.

Mia knows of the delivery reliability concerns with Light Manufacturing, and the impact unreliable delivery can have on Hardee’s customers and, consequently, Hardee’s reputation.  Mia knows that earning “commissions” during her retirement would certainly make retirement easier.  Mia is uncomfortable about falsifying the analysis, but begins to rationalize it to herself.  “I’m going to retire in a few weeks, and they won’t be able to do anything to me once I’m gone.”  “I wouldn’t be in this financial position if Hardee paid me better and had a better retirement plan.”  “Light Manufacturing may turn out to be a reliable supplier.”  “The “commission” was offered to me, I didn’t demand it for my help.”  Mia thought about what her boss, Steve (Hardee’s CFO) would think.  She has known Steve for most of her career and is they share mutual respect.  Steve is aware that Mia will retire soon, and has gone out of his way to make her last few months easy.  She thinks he would not have a problem with the plan she and John are considering.

Answer the following questions:

  • Do you believe Mia decision to accept the “commission” would be ethical or unethical. Why?
  • which section of the IMA’s Code of Ethics is (are) applicable in this situation? Why?
  • Mia has four options:
  • Say nothing to Steve. Provide a favorable report on Light Manufacturing and earn the “commission”.
  • Say nothing to Steve. Provide a truthful report on Light Manufacturing, hope they gain preferred vendor status and, if so, accept the “commission”.
  • Speak to Steve about John’s plan. Provide a truthful report on Light Manufacturing, hope they gain preferred vendor status and, if so, accept the “commission”.
  • Speak to Steve about John’s plan. Provide a truthful report on Light Manufacturing and, if they receive preferred vendor status, reject the “commission”.

Give reasons why each of the four possible courses of action is either appropriate or inappropriate.

Paper format:

  • Use 12- point font, double-spaced, 4 page maximum length. Include article title on top of first page
  • No name on front of paper. Write name on the back side of the last page.


  • The assignment is worth 15 points.
  • Grading will be based on the following:
  • Content – Shows relationship to subject. Adequate support and evidence by examples. Demonstrates understanding of major concepts and elements.
  • Organization – Is precise, pertinent, and well supported. Provides a logical conceptual approach. Clearly links concepts and principles to subject. Avoids tangential material that detracts from central focus. Provides clear transitions between and within sections of paper.
  • Completeness and AccuracyInterpretation of data and concepts are appropriate. Adheres to and fulfills the requirements of the assignment.
  • Clarity of Expression – Sentences are clear, concise, varied, and logical. Vocabulary and terminology are appropriate to the subject, purpose, and audience. Subjects agree with verbs. Elements are parallel. References and word order are clear. Spelling, punctuation, capitalization, possessive forms, etc., are correct. Manuscript has been proofread and corrected.



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