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
Bob wants to ensure that he meets his ethical and legal requirements, but doesn’t realize the ultimate responsibility lies between Quality Lumber and the end user. John White makes a valid argument for completing the transaction. John has an obligation to the company and his employees. John has to ensure that his company makes a profit and continues to grow, especially during difficult economic times. John has to be able to maintain valuable client relationships since repeat business it vital. Profit ensures that employees maintain their jobs. Employees need to perform tasks within the realm of their job description. Employees that have ethical or legal concerns about business practices need to address those concerns with management. Management will determine the best possible solution for the company taking into account the ethics, legal issues, the company, stakeholders, and employees. Management must make the best possible decision in order for White Lumber to remain competitive. Management must balance ethics with their financial responsibilities in order to manage risks. John’s decision to go ahead with the transaction has several risks. If the end user of the lumber sustains an accident or death, then White Lumber’s reputation will be ruined since they had knowledge that the lumber was going to be used for scaffolding. In business, a bad reputation can ruin current business relationships and prevent White Lumber from creating