Author Question: Sally always looked forward to attending the Southwest Association of Bicycle Manufacturers' ... (Read 50 times)

RYAN BANYAN · **on:** Jun 29, 2018

Sally always looked forward to attending the Southwest Association of Bicycle Manufacturers' Conference. She especially enjoyed the open-bar session that preceded the welcoming banquet, because it gave her a chance to network and pick up ideas on industry trends. Sally was enjoying her second glass of wine with a group of other sales reps when she realized they were competitors of her company.

Hey, Sally warmly greeted Joe and Herb as they exchanged a round of handshakes. Good to see you both again

Joe, a sales rep from Saunder Cycles, said, Yeahit's been a while. Hey, just curious, what do you two think of the new titanium spokes? We may be switching all our high-end models to titanium in the near future..

Herb, a sales rep from Cycle Fast Manufacturers, responded, How's that going to affect your prices?

Sally knew she was not supposed to discuss prices with competitors, but she didn't want to appear unfriendly. Besides, they were just having a few drinks and informal conversation. Still, Sally wondered if she should continue participating in this conversation, and if not, how to exit gracefully.

Sally and her competitive counterparts are just having drinks, and the topic of product prices just happens to come up. Should Sally be alarmed?

Question 2

Because Kenneth had been gone so many nights, he decided it would be a nice treat to take his wife, Sue out to dinner. Furthermore, it would be free, because he could put it on his company expense account and no one would know.

Sue was surprised when Kenneth pulled their car into the parking lot of the most expensive French restaurant in town.

Kenneth, Sue said in shock, how can we afford to eat here? We're still paying off Donnie's braces, and Karen's tuition bill is due..

Oh, don't worry, Kenneth replied. This goes on the company expense account. I think it's important to keep my most important client happy, he said with a wink.

What?? exclaimed Sue. Since when does your company pay for dinner with spouses?

Kenneth replied . . .

Kenneth and Sue both can probably rationalize that he is underpaid, overworked, and thus deserving of a free dinner. What do you think?

Jody Vaughn · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

While the situation described in the role play appears innocent enough, any collusion between competitors with regard to price fixing is illegal in the United States. Although the sales representative may have asked about pricing out of curiosity or to keep the conversation going, the fact is that Sally may be in a precarious position. If price fixing were to occur, even if Sally was not actively involved, she still could be a witness. The best rule of thumb is to remember it is illegal to discuss prices with competitors.

Answer to Question 2

If Kenneth truly believes that he is underpaid and overworked, he needs to talk with his supervisor and or consider looking for a higher paying job. Similarly, if Sue is pressuring Kenneth to make more money or complaining about a lack of material possessions, they, as a couple, need to review their finances. Either way, charging a non-business dinner to an expense account is stealing. To further try to legitimize unethical behavior by rationalizing the behavior is unacceptable. Padding a company expense account for personal gain is illegal and unethical and, if caught, may likely result in dismissal from the company.