Assignment

Thomas (Tom) Langley knows he has to make this decision alone. He has been trying to reach his boss, Craig Montagu, since last night to find out what he should do, to no avail.

Tom has been with Cedar Construction Co. for five years and has earned satisfactory performance reviews in three of those years. The last two were less than positive, however. Tom's job is to research and bid on large contracts for Cedar. His current assignment has taken him out of the country. Through private contacts, Tom discovered that his proposed bid on an important contract is too high and probably will not be accepted if submitted. The $10 million contract represents a significant amount of business for Cedar. Before he left on this assignment, he was told by Craig that his career hinged on securing this project.

As Tom pored over the specifications for the bid, he realized that the client had not clearly specified the grade of steel to be used. By following the letter and not the spirit of the project requirements, Tom could submit a lower bid based on using a cheaper grade of steel in the project; such a bid would probably be low enough to be accepted. However, Tom also knows that using the cheaper steel could result in a long-term weakening of the structure. On the other hand, he also knows that others in the construction industry have occasionally done the same thing.

Because Cedar Construction's organization is rigidly centralized, all deviations from proposed bids have to be cleared with an immediate supervisor. Changing the bid without authorization would not only violate Cedar's decision-making hierarchy; it would also breach the company's organizational cultural of respect for authority and rules. However, Tom has not been able to reach Craig, who is apparently preoccupied with another emergency situation. Tom decided to call Craig's superior, Janet Darnell, a Cedar vice president and daughter of the company's founder. She told him that she was not sufficiently familiar with the project to make a decision and advised him to continue trying to contact Craig, the only person who could properly authorize a change in the bid. She reminded Tom that it was improper to go over his superior's head, regardless of the situation.

It is 11:00 A.M., and Tom still hasn't reached Craig. Tom's bid for Cedar Construction has to be faxed to the project coordinator by noon.

Requirements:

1. Identify the ethical issue or issues facing Tom.

2. What would you change regarding the decision making process that Cedar Construction Company is currently using. Please explain your changes.