Reference no: EM133123546
Question: Susan works in the imports branch of a business chain, a cafe called 'Latino Spin( with 5 cafes around Melbourne. Latino Spirit is well known for their promise to sell '100% genuine Colombian coffee'. Last year the chain gained some media terrain and published a TV and social media advertisement that shows a person of Russian background who, after a week of drinking a daily cup of Latino Spirit coffee, wins a salsa competition. The ad closes with the slogan/catch phrase: 'This is Latino Spirit, the coffee that makes you dance'. Susan does not like the ad. She has heard about legal problems based on this kind of slogans, but the CEO of the company likes it and goes with it despite of her advice.
Last week, Susan visited the warehouse of Latino Spirit. This is the area where the coffee arrives from Colombia and is packed for distribution to all 5 chains. She visits the warehouse once a month, usually in the mornings, but, as she has been busy, she visited late in the afternoon. When she was leaving, she noticed something unusual. A truck had just arrived, bringing big containers of what appeared to be used coffee grounds (ie, the waste left after coffee has been brewed). Susan asked a bystander worker what that was for, and he replied that the boss (Ray) collects the used coffee grounds from all the chains, apparently, to use it as compost for his farm.
Ray is the CFO of Latino Spirit. He is also the husband of Susan's cousin, and who got Susan her job in the company. Susan is very grateful to Ray as she had not been able to find a job after graduation and she has a university debt.
During the weekend at her cousin's, Susan asked her about the 'coffee compost' and she told her that they were not planting anything this season in the farm. Susan gets suspicious and decides to sneak into Ray's home-office to see if she could find any information. She finds onto Ray's desk, invoices from a company called Latino Soul for the selling of cofee [sic) in the last six months.
On Monday, Susan asked Ray about the used coffee grounds delivered to the warehouse (she does not tell him about the invoices she saw(. He first tries to teN her the story about the compost, but then he tells Susan that he is going to trust her with some confidential information about a project. Ray explains that he googled and found that it was totally safe to re-use the coffee grounds, once. So, he has worked with some people in the warehouse mixing 10% of used coffee grounds -collected from the 5 branches-with 90% of pure coffee. They have already sold this blended formula in the in the 5 cafes during the last 6 months. No complaints have been filed. This will increase the production and reduce the costs. hence. they could lower the price of their coffee as an advantage before their closest competitor.
Ray goes on and tells her that the project has already been presented to the major shareholder of Latino Spirit, and he was ok with rt as long as it would save money to the company and help them beat the competition. The company is already losing some money dealing with the legal suing of the TV ad Ray emphasises that they need her 'on board', as the head of imports, to sign the bogus invoices from Latino Soul for the 'purchase' of the cofee (sic) and the re¬negotiation of the deal with their Colombian supplier. Susan cannot beieve what she is hearing. They all know that decreasing the sales of their Colombian supplier would affect a lot of people back in Colombia. She asks Ray about this and about safety issues and whether that would bring more legal problems due to the false promise of '100% genuine Colombian coffee', but he replies: 'Colombia is not our problem, we must be faithful to our (emphasis added! people Now, the blended formula is perfectly safe and the used coffee grounds are still from Colombia. It is not like we ore lying... Come on Sue, remember that in the last board meeting it was mentioned that if we managed to reduce the company's yearly expenses to at least 596, the finances team, including you and me, will receive a big bonus. We both could use that money. Besides, you owe me'.
Susan does not know what to do. She needs the job. The bonus would help her settle the university debt; but she is worried that she could get into legal trouble and that the mixing of old coffee grounds could eventually cause harm to customers. However, if she says no, she will be fired, and they would carry on the project anyway. She knows she cannot disclose any of the information given due to a confidentiality agreement in her contract and if she does, it could severely harm her family relationships.