Commission Conundrum ABC Technology Solutions

Question: What is the Commission Conundrum for ABC Technology Solutions? Answer: Introduction ABC Technology Solutions is into the business of selling technology products to retail distributors. The company despite of its fundamental soundness has not been profitable in the past few years due to the economic down turn. The company has also filed for Chapter 11 bankruptcy to reorganize and grow its market operations again. Conundrum Faced The CEO of ABC Technology Solutions is facing a challenging decisive dilemma regarding the disbursement of commission rates for the employees of the Organization including the regional managers and the Sales staff of the Organization. The error in the corporate accounting system had inflated the sales numbers by 4%, making the employees expect commissions beyond their actual performance. Ethical decision making process framework The Model of ethical decision making framework developed by Professor Melendez from the University of Arizona provides assistance for resolving ethical dilemmas while making sound decisions in organizational and personal context (Ferrell and Fraedrich, 2010). Let us apply this framework to make a ethical and sound decision on the behalf of the CEO of ABC Technology Solutions, to resolve he commission conundrum faced by him. Identification of key Stakeholders The employees would be the key stakeholders of the Organization affected by the decision taken by the CEO. The employees of the Organization would be highly monetarily benefitted if the CEO continues to disburse commission amounts based on inflated Sales figures. In case the sales figures are rectified and the commissions are recalculated, these same set of employees may feel bad if their commission amounts are slashed in comparison to the amounts expected by them. Low employee morale might also lead to further problems of employee resignations and increased employee turnover. Reviewing the financial implications The Companys existing financial position is highly unsound. The Company would not be in position to bear the extra bonus and commission expenses, caused due to inflated sales figures. The profitability of the company would be badly affected if the CEO continues to disburse commission amounts based on inflated Sales figures. Consideration of the law The company has filled bankruptcy under chapter 11. The company would be under a high vigilance of the US courts and would legally be not allowed to calculate employee compensations and commissions on wrongful amounts. The company may be legally penalized for this. Application of the ethical thought Finally, it would be ethically wrong to pay out commissions and bonuses on untrue and inflated figures. The mistake displayed in the corporate accounting system has to be confessed to the stakeholder; So that the desirable corrective actions may be taken for next financial year. Ethical decision The CEO of the company may go for calling up an all hands meeting (all employee) to explain the error displayed by corporate accounting system, and should go for rectifying the inflated sales figures in the system. The bonuses and commissions may be calculated based on the actual sales figures. Conclusion Rewarding the Employees with commissions beyond their actual performances would not be an ethically right decision. Further, it would not be practically possible for the indebted company to carry on the excess expenditure on commissions. References Nelson William, 2005, An Organizational Ethics Decision-Making Process, Healthcare Executive, retrieved on February 6th 2015 from https://www.ache.org/abt_ache/ethicstoolkit/ethical_decision_process.pdf Ferrell and Fraedrich, 2010, Business Ethics, 7th edition, Southern-Western Cengage Learning: USA.