He ruined the product, maybe the brand.

The head of accounting for a Fortune 500 company confronted the CEO.  “Why are you shipping product to buyers when the product is not finished?”  The response was curt,  “We’ll finish it in the field.”  Ah, meeting the numbers.  You can’t book ’em unless you ship.  The CEO knew his head of accounting would never go for the old 32-day month.  So, in a new twist, he was booking revenues for products shipped that were not quite done.  Technical compliance with accounting rules.  A loophole.  A diem to be carpe-ed.  The best laid plans . . . Finishing in the field does have its drawbacks, such as customers wondering what’s happening, the need to get company experts to the customers, and those unanticipated glitches that might have been remedied easily prior to shipment were exacerbated in size and distance by unfinished products around the globe.  Oh, sure.  They met the numbers, only to lose them to extra costs.  Going forward, the company had to cope with lost customers.  You can’t ship product, however early, to customer you don’t have.  Short-term decisions.  Less-than-forthright financial reports.  And customers who did not sign on for unfinished product.

We don’t worry about ethics because we’re fussy do-gooders.  We worry about ethics because they are a critical component of business survival.  The plain, hard truth is that the shipment early was not honest, for those using and relying on the financial reports but, perhaps more importantly, for the customers.  All deserved candor.  A little candor goes a long way in saving a product, maybe the brand.  And so the former head of accounting concluded, “He ruined the product, maybe the brand.”

By the way, the former head of accounting is doing just fine.  He moved on to better things.  The company and the CEO continue to struggle.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
This entry was posted in Ethical Dilemmas. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.