Assignment Prompt & Instructions
Timmco, Inc. is a publicly traded corporation located in Denton, Texas that makes and sells high-pressure industrial spraying equipment used in many different commercial liquid spraying applications. It prides itself on its top-quality manufacturing processes and promotes its products as “100% made in the USA.”
Sales have been declining recently due to competition from lower-priced sprayers made by foreign competitors and has resulted in Timmco looking for ways to reduce costs. One option under consideration is to find a new source for the high-pressure valves used in its products. These valves are complicated mechanisms that operate under very high internal pressure. The quality and durability of these valves is a very important component to the company’s products. This is because if the valve was to burst, it would propel pieces of metal with great force in all directions. This would pose a significant hazard to anyone in the nearby area, including the operator of the equipment.
Timmco currently has a five-year contract to purchase 1,000 valves a year at $2,500 per valve from Blagg Industries, a small privately owned business located in Boone, North Carolina. The contract has been in place for three years and has two more years to run.
Blagg Industries has a dozen employees. Timmco is its primary customer. If Blagg Industries loses Timmco’s business, it would most likely have to lay off employees and might even go out of business.
Timmco is considering outsourcing the valves from Sanco, an overseas supplier in the country of Slawrovia, instead of buying valves from Blagg Industries. The Sanco valves only cost $1,000 each but are known to be of lower quality than the Blagg Industries valves and are more likely to burst. Sanco can supply these valves at such low cost because they pay their workers, including children, less than the equivalent of $5 per day and work them long hours in hot, dangerous conditions. However, these practices do not violate local labor or employment laws.
Slawrovia is a poor country, but it has a large government bureaucracy, and there is a lot of “red tape” involved in getting approval to export manufactured goods to other countries. In fact, it might take more than a year for Sanco and Timmco to obtain the necessary approvals for Sanco to export the valves to its manufacturing facility in Texas. However, the CEO of Sanco informs Timmco executives that he is related to the Slawrovia Minister of Commerce and that the export process can be completed in less than a week. But for this to occur, Timmco must make a $20,000 “gift” to this government official. The Sanco CEO further explains that these types of payments are a common business practice in Slawrovia.
In addition to finding a new, low-cost valve supplier, Timmco plans to increase sales by running a new marketing campaign that focuses on their commitment to American-made quality. The tagline will be “Made in the USA by Americans, for Americans.”
Assume you are a high-level executive at Timmco and have been requested by the company’s board of directors to analyze the legal and ethical issues presented by this scenario.
Your legal and ethical analysis should:
– Analyze a possible breach of the Blagg Industries contract and remedies.
– Analyze how the doctrine of negligent torts could apply to Timmco products.
– Analyze how the doctrine of product liability could apply to Timmco products.
– Analyze how the Foreign Corrupt Practices Act would apply to Timmco business practices.
– Analyze any issues of deceptive advertising in Timmco’s new marketing campaign.
– Apply one or more of the ethical theories from Chapter 4 of the course textbook _Business Law: The Ethical, Global, and Digital Environment_ (18th ed.) to ethical issues that may exist with Timmco’s new business strategy.
6 pages
apa
3 references min use book Prenkert, J. D., Barnes, A. J., Perry, J. E., Haugh, T., & Stemler, A. R. (2022). Business law: The ethical, global, and digital environment (18th ed.). McGraw-Hill.