Answer to Question #259922 in Economics of Enterprise for Kajal

Question

A sales representative for a struggling computer supply firm has a chance to close a 

multimillion dollar deal for an office system to be installed over a two year period. The 

machines for the first delivery are in the company’s warehouse, but the remainder would 

have to be ordered from the manufacturer. Because the manufacturer is having difficulty 

meeting the heavy demand for the popular model, the sales representative is not sure that 

subsequent deliveries can be made on time. Any delay in converting to the new system 

would be costly to the customer; however the blame could be placed on the manufacturer. 

Should the sales representative close the deal without advising the customer of the 

delivery problem? Discuss the pros and cons of the decision the sales representative 

chooses to take.

Answer 1

A sales representative is the bridge between the seller and the buyer of products and services.

The business activities are economic activities. It is different from our everyday life activities. It involves bargaining where seller and buyer hide their full potential sometimes or do some bluffing.

Business ethics does not allow a sales representative to deceive the seller and the buyer.

The ethics of business is different from our everyday life ethics because the dealings are done as seller and buyer and not as a family member or a friend. It involves loss and profit and, no one would like to suffer losses in business or life.

The client does the deal in good faith believing the information provided by the sales representative is true and trustworthy.

In this scenario, the sales representative has got the chance to do a multimillion-dollar deal for an office system. It has to be installed in two years period.

The manufacturing company produces popular models and its products have good demand in the market.

The sales representative is aware that one consignment can be met because it is in the warehouse.

For the further consignment, he cannot make a promise because due to heavy demand, they may fail to deliver it in time.

The sales representative is aware that if the computers are not delivered in time the customers will face heavy losses.

The sales representative must inform the customer that his company has got many orders in hand and the company is struggling to meet the order in time for all the customers. It will show the demand for the product to the new customer.

He should inform the customer that the company would try its level best to meet the demand, but he cannot rule out the possibility of a delay due to many orders the company is having in its hand.

If the customer is ready, he can make a deal.

If the sales representative makes the deal without disclosing the fact, he will be deceiving the client. He knows for any delay; it would be on the part of the manufacturing company. After knowing the fact that the manufacturing company would be in trouble, he makes the deal it will be unethical and cheating with the company of which he is a representative.

He would put his company in trouble because the buyer can sue the manufacturing company for not meeting his demand in time and cheating. The client can claim for all the losses. It would spoil the name of the manufacturing company and adversely affect the business in the market.

It is difficult to establish a name in the market because many firms are waiting in Queue.