Samantha Wells (Sam), a marketer at Vernex, is discussing shipping dates with Duke Stillwell, the shipping manager. Sam notices that Duke is shipping 300,000 HS200 fire alarm sensor circuits out of inventory. Sam asks Duke why the company is finally writing them off this inventory, especially before the merger is finalized. Duke informs Sam that Ed Naughton, the director of marketing, sold the sensor circuits to Executron, apparently at full price. Sam is confused by Executron's purchase and also questions why Ed would charge them full price when the new HS300s are about to be introduced. Duke assures Sam that Ed knows what he is doing and comments that he is grateful for the much needed warehouse space. Ed is talking with Carrie Ventana, the administrative manager, in the lobby when Sam joins them. Sam asks Carrie if she is going to attend the Dallas conference. Ed remarks that this is a conference they would not miss and that management has been going over the records carefully and should be announcing the merger and the new director of marketing then. Carrie tells Ed that he is a shoo-in for the job, especially since he just made the big Executron sale. Sam congratulates Ed on the sale and asks him why he did not notify her about it. Ed claims that he forgot and suggests a promotion for Sam if he becomes director of marketing. After Ed leaves, Sam tells Carrie that she wanted to talk to her about the Executron sale. Sam asks Carrie whether Executron has ever bought sensor circuits from Vernex before. Carrie offers to go to her office to check the computer's central customer file. The computer verifies that this is the first time Executron has bought from this division. Sam explains that she is concerned because marketing overestimated the market for these circuits and now, suddenly, Ed sells the circuits to a company that appears to have no use for them. Carrie comments that the president of Executron is Ed's good friend, so he would not do anything to hurt them. Carrie adds that she knows that Executron is doing well financially because Ed told her to invest in them years ago when he did, and now she regrets not following his advice. Sam still questions why Ed did not give Executron a discount for the old circuits. Carrie defends Ed's reputation and asks Sam why it is wrong for Ed to make himself look better, get rid of a liability, and beef up the bottom line. Sam admits nothing is wrong, if it is a legitimate sale. But what if Executron returns the circuits right after Ed's promotion?⁹

Questions

1. What are the main ethical issues, if any, in the Vernex, Inc., case?

2. What are Samantha (Sam) Wells's options?

3. How do the three levels of moral development relate to Sam's situation?

4. What would you do?