Question

TORENTO CONSTRUCTION: ETHICAL CONTRACTING On December 27, 2010, Cary Holmes, manager of the Supply Chain Management (SCM) group at Torento Construction Inc. (NCG), was in his office in Torento, Ontario, trying to organize the thoughts running through his head as a result of a recent bidding to save operating costs at NCG. There was no problem in terms of the final outcome; in fact, the bid was going to result in cost savings of 25 per cent, which was exactly what NCG's founder and chief executive officer (CEO), Michael Wells, had asked for. The problem was that the cost savings represented only part of the story. He wondered whether the process to achieve the savings was unethical. As he gazed out of his office window, Holmes reflected on the series of events that had occurred over the previous few weeks. INDUSTRY OVERVIEW The construction industry's main activities came from the construction of buildings, houses, and other engineering projects (e.g., utility systems and highways). The sector also involved the maintenance of infrastructure. Much of the work in the industry was done through contracts with the owners of construction projects, or through subcontracts with other smaller construction companies. In 2008, construction projects put in place within the Canada peaked at US$2.32 trillion. The industry employed workers in a wide variety of positions, including labourers, carpenters, and electricians. During times of economic growth, both the private and the public (e.g., federal, state, and municipal government projects) portions of the construction industry flourished. The Global Financial Crisis and Industry Downturn Like many industries worldwide, the Canada construction industry experienced a drastic and unprecedented decline following the financial crisis and recession in the late 2000s. Economists agreed that the economic All currency amounts are in US$ unless otherwise specified: FMI Corporation, CANADA Markets Construction Overview 2016. 2015. 2. accessed January 17, 2017, www.smacna.org/docs/default-source business-management/Imi-s-2015-4-5- markets-construction-overview.pdf.

Answer 1

1.

The details to be taken into account when judging Mirror 's conduct are, Mirror was friends with current NCG subcontractors and, in need of the hour, he chose personal relationships over company benefit. Which exhibits an unethical approach.After initial submission, the three subcontractors resubmitted their offer, and the new offers were exactly in the range of bids submitted by others, which means they had a glimpse of Mirror 's proposal. It tricks the whole cycle of bidding, which is absolutely immoral.Even when the company tried to reduce the operating capital by 25 percent, Mirror agreed with the subcontractors that a 10 percent reduction in labor would not have been as effective as Holmes planned. Miller avoided the conversation with Holmes, instead taking ideas and presenting them to his utterly immoral subcontractors who were his friends.

2.

The primary and secondary stakeholders about Mirror's rulings are,  Wells, Holmes and the three subcontractors are primary stakeholders, which have a direct impact on the decision by Mirror. Wells could lose the position of CEO if he could not handle the money, the same goes for Holmes, and subcontractors could lose their contract with NCG if Mirror did not help them. Secondary stakeholders were the New Bidders who could theoretically get work from NCG, the NCG Competitors who could suffer an advantage or disadvantage because of MIrror 's decision and the NCG Business Partners.

3.

The three implications that may arise from Mirror 's behavior are, The negative public image and media picture could occur for NCG if it appears that the bidding process was compromised and someone from the inside assisted the three original subcontractors with details on bids from other competitors. The three subcontractors may have continued their contracts by decreasing bids with Mirror 's help, but the competitors in the bidding process could have ended up. THis may be a disappointment to NCG in the long term.Thirdly, if the other subcontractors get to know about the fake bidding, NCG may suffer in the future from no other option available to contract other than these 3 original subcontractors. If they are biased they may lose consumer support.

4.

The applicable ethical principle and procedure that Holmes will follow in this situation is to let the management or Michael Wells know about the whole thing in detail along with details and figures, and to recommend that the management perform a new bidding process without the original 3 subcontractors, or even take out new bids from them, so that no biased process is followed.