his scenario is based on the example of Shunyuan and Clemence presented in Module 5.3.
Shunyuan owns a string of retail stores selling ladies’ clothing in Toronto. He has been very successful at marketing clothes to women in their twenties and early thirties. Shunyuan wants to expand into other parts of Ontario, so he has decided to open a store in Huntsville, a small town several hours’ drive north of Toronto in what is locally known as “cottage country.”
Shunyuan needs someone to act in his place at the Huntsville store because he cannot be there and in his Toronto stores at the same time. Moreover, he also wants someone familiar with the “cottage country” market. He needs a locally based manager to work full time at the store.
The most experienced job candidate in the targeted demographic market is Clemence, so Shunyuan hires her. He decides that because Clemence has the requisite local knowledge, she should hire and manage staff for the Huntsville store, arrange publicity and advertising, deal with the local landlord and generally handle day-to-day operations. Shunyuan will only occasionally be able to come to the Huntsville store. Clemence has thus been given broad discretionary powers over the Huntsville store’s operation.
The following are three independent situations that arose after Shunyuan hired Clemence as the manager of the Huntsville store.
Clemence recommended to Shunyuan that the store should support a local initiative to build goodwill in the community. Shunyuan thinks this is a great idea and suggests that support should go to the local beauty pageant. Clemence tells him that this would be a bad idea because it would alienate the substantial base of shoppers who, like herself, see beauty pageants as old-fashioned and demeaning. She suggests that the store support an outdoor adventure program for teenage girls. Shunyuan tells Clemence that he thinks this is a bad idea because it does not promote the kind of “feminine look” that has made his Toronto stores so popular.
A week after her conversation with Shunyuan about supporting a local initiative, Clemence decides that the store will make a charitable contribution to the outdoor adventure program for teenage girls rather than to the beauty pageant.
What, if anything, should Shunyuan do?
Shunyuan has announced a policy at all his stores, including the Huntsville store, dictating that merchandise in good condition can be returned for a full refund within 30 days of purchase. However, Shunyuan has privately told managers that when merchandise is returned for a refund, they should use any reason they can for finding customer-caused “defects” in the merchandise, thus making it ineligible for a refund.
Clemence tells Shunyuan that this seems deceptive and could potentially alienate customers. Shunyuan’s response is that his experience in the Toronto stores tells him that (a) if the manager is aggressive enough about finding faults in the merchandise, most customers will give up on seeking a refund, (b) some will think that they actually did damage the merchandise and (c) the great majority of customers will never try to return the merchandise anyway. Shunyuan defends what he is doing as “smart marketing” and “necessary to keep up with competitors while keeping costs under control.”
What should Clemence do?
1. in your memo you must discuss
What are the main ethical concerns in each of the three situations?
Who are the stakeholders?
What are the feasible actions or alternatives Shunyuan or Clemence could take?
Evaluate each alternative you came up with. For each alternative, would the actions be appropriate with respect to business ethics?
What should Shunyuan or Clemence do in each case? Defend your choice based on your analysis.
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