Question

Thomas Perdue had built up a successful development company. When he became city commissioner, everyone said it was good to have a businessperson on the commission. They said businesspeople know how to control costs and make sound economic decisions, and Thomas could help the city tighten its belt. One of his first projects was an analysis of the human resources department. He claimed that if the whole function was outsourced, it would save the taxpayers money. A year later, after painful layoffs and a bumpy transition, the new contractor, NewSoft, was in place. Two years later, NewSoft’s billing rates had steadily increased, and there were complaints about service. After five years, the supposed savings had vanished, and Thomas had moved on to state government, his campaigns fueled by “generous” campaign contributions from companies like NewSoft.

1. Although this case differs from “fraud” in the usual sense, describe the conflict of interest in this case. Who benefitted, and who did not?
2. When making business decisions of this sort, some factors are quantitative, and some are not. Discuss some of the non quantitative factors related to this case.

Answer 1

- Answers Page 1 E as per the information given in the questions, Thomas Perdue had built up a successful-- - 1 In the beginning, I believe that Thomas and the citizens have the same interest which is to reduce coste Later on, Thomas and citizens. have I conflict of interest, Thomas was being self- I rational by doing things that benefit himo C On the other hand, the interest of citizens was to maintain low cost structure obviously, I citizens had to suffer because New Soft's

page-2 I billing rate increase over the year. *Non-quantitative factors that affects decisions I like this includes ethical, moral and reasonable. These factots cannot be measured; however, I when making business decisions of this soot, the decision should be Ethical, moral and Reasonable. Please hit a positive vote it helps me thank you