Prabhat was working as Vice President (Marketing) at Sterling Electric Ltd., a reputed multinational company. But presently the company was passing through the difficult times as the sales were continuously showing downward trend in the last two quarters. His division, which hitherto had been a major revenue contributor to the company’s financial health, was now desperately trying to procure some big government order for them. But their best efforts did not yield any positive success or breakthrough.
His was a professional company and his local bosses were under pressure from their London-based HO to show some positive results. In the last performance review meeting taken by the Executive Director (India Head), he was reprimanded for his poor performance. He assured them that his division is working on a special contract from the Ministry of Defence for a secret installation near Gwalior and tender is being submitted shortly.
He was under extreme pressure and he was deeply perturbed. What aggravated the situation further was a warning from the top that if the deal is not clinched in favour of the company, his division might have to be closed and he may have to quit his lucrative job.
There was another dimension which was causing him deep mental torture and agony. This pertained to his personal precarious financial health. He was a single earner in the family with two school-college going children and his old ailing mother. The heavy expenditure on education and medical was causing a big strain to his monthly pay packet. Regular EMI for housing loan taken from bank unavoidable and any default would render him liable for severe legal action.
In the above backdrop, he was hoping for some miracle to happen. There was sudden turn of events. His Secretary informed that a gentleman Subhas Verma wanted to see him as he was interested in the position of Manager which was to be filled by him in the company. He further brought to his notice that his CV has been received through the office of the Minister of Defence.
During interview of the candidate-Subhash Verma, he found him technically sound, resourceful and experienced marketeer. He seemed to be well-conversant with tendering procedures and having knack of follow-up and liaising in this regard Prabhat felt that he was better choice than the rest of the candidates who were recently interviewed by him in the last few days.
Subhash Verma also indicated that he was in possession of the copies of the bid documents that the Unique Electronics Ltd. would be submitting the next day to the Defence Ministry for their tender. He offered to hand over those documents subject to his employment in the company on suitable terms and conditions. He made it clear that in the process, the Sterling Electric Ltd. could outbid their rival company and get the bid and hefty Defence Ministry order. He indicated that it will be win-win situation for both-him and the company.
Prabhat was absolutely stunned. It was a mixed feeling of shock and thrill. He was uncomfortable and perspiring. If accepted, all his problems would vanish instantly and he may be rewarded for securing the much awaited tender and thereby boosting company’s sales and financial health. He was in a fix as to the future course of action. He was wonder-struck at the guts of Subhash Verma in having surreptitiously removing his own company papers and offering to the rival company for a job. Being an experienced person, he was examining the pros and cons of the proposal/situation and he asked him to come the next day.

(a) Discuss the ethical issues involved in the case.
(b) Critically examine the options available to Prabhat in the above situation.
(c) Which of the above would be the most appropriate for Prabhat and why?

Ethics

Ethics: Case Study

2022

20 Marks

This case highlights the precarious position of Prabhat, torn between professional duty and personal exigencies. The central ethical dilemma revolves around Prabhat's choice between accepting stolen information for personal and company gain versus upholding ethical conduct and professional integrity.

Stakeholder Identification
Prabhat Stakeholder diagram

Prabhat,
Sterling Electric Ltd.,
Unique Electronics Ltd.,
Ministry of Defence,
Subhash Verma,
Prabhat's family,
Sterling Electric's employees, and
The public.

(a) Ethical Issues Involved

Breach of Confidentiality and Insider Information: Subhash Verma offers confidential bid documents from a rival company in exchange for employment. This is a gross violation of trust and ethics, amounting to espionage.
Conflict between Professional Duties and Personal Interest:
- Prabhat faces a severe ethical conflict—upholding company values vs. securing his job and livelihood.
- His personal financial hardship adds emotional strain, possibly clouding ethical judgment.
Violation of Fair Competition Norms: Accepting the documents would mean manipulating the tendering process, defeating the principle of level playing field in public procurement.
Corporate Integrity and Reputational Risk: If the act is discovered, Sterling Electric could face legal action, blacklisting, and loss of credibility.
Employment via Undue Influence: Subhash’s appointment would not be on merit but on quid pro quo, which violates recruitment ethics and organizational norms.
Abuse of Political Influence: The candidate is recommended by the Defence Ministry—suggesting undue political interference, which itself raises questions of favoritism.

(b) Options Available to Prabhat:

Option 1: Accept the confidential bid documents and appoint Subhash Verma.

Pros	Cons
High likelihood of winning the Defence Ministry tender	Gross violation of professional ethics and fair competition
Saves Prabhat’s job and division from closure	Legal risk for the company (espionage, blacklisting)
Personal financial crisis is resolved	Loss of corporate reputation and stakeholder trust
Short-term organizational gain	Encourages unethical behavior and sets wrong precedent

Option 2: Reject the offer and report Subhash Verma to authorities.

Pros	Cons
Upholds highest standards of ethics and probity	Risk of losing tender due to lack of insider advantage
Sends strong message about zero tolerance toward corruption	May result in division shutdown and Prabhat’s job loss
Protects tendering system and corporate integrity	Personal financial hardship could worsen
Legal and moral compliance assured	Potential backlash from political actors or ministry

Option 3: Refuse to accept the stolen documents but recruit Subhash Verma on merit.

Pros	Cons
Maintains ethical boundaries by rejecting insider info	Subhash’s ethics remain questionable; trust deficit may persist
Utilizes Subhash’s technical and marketing skills for future opportunities	Missed immediate competitive edge in Defence Ministry bid
Keeps door open to win tender through legitimate means	May attract scrutiny if Subhash’s connection to tender leak is exposed later
Avoids legal complications while partially securing business interests

(c) Most Appropriate Course of Action:

Option 2: Reject Subhash Verma's unethical offer and report the matter to appropriate authorities (e.g., internal ethics committee or HR/legal department).

Upholds Integrity and Ethical Standards: Prabhat’s duty as a professional is to protect the reputation of his organization, even at the cost of personal difficulty.
Prevention of Legal Risk: Accepting stolen documents would violate laws on trade secrets and could invite legal action from the rival company or the government.
Protects the Tendering System: Allowing insider information damages the sanctity of public procurement, impacting the broader ecosystem of fair competition.
Long-term Professional Reputation: A temporary gain via unethical means may destroy Prabhat’s career credibility forever.
Moral Courage over Convenience: Ethics requires one to stand for what is right, even in adversity. Like E. Sreedharan (Metro Man), who refused to cut corners despite political and bureaucratic pressure.
Role Model for Organizational Ethics: By rejecting the offer, Prabhat can inspire an ethical culture in his team and win long-term trust from management.

The situation faced by Prabhat underscores the real-world challenges where ethical choices clash with professional pressure and personal crises. However, true leadership is tested in such moments. By upholding integrity, rejecting unethical shortcuts, and seeking lawful and transparent solutions, Prabhat not only preserves his own moral compass but also reinforces the ethical culture of his organization.

Answer Length

Model answers may exceed the word limit for better clarity and depth. Use them as a guide, but always frame your final answer within the exam’s prescribed limit.

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