Reference no: EM132301733

Respond to the following ethics scenario:

Tom is a salesperson at LI home audio systems. Yesterday was the last day of the competition for this year’s best salesperson, and it seems that Tom would be a runner-up as he was last year. The winner receives $1,000 in cash in addition to the usual commission. Just one hour before closing time, Mike, a customer who visited the store last week, came back with the exact amount of cash for the audio system he saw last time, but the product was no longer available. Instead, Tom suggested a different model with a $100 higher price tag. Mike said he would buy it if Tom would give him a $100 discount. However, the audio system’s brand is price regulated. That is, all of the retailers that carry the brand should sell the audio system for the suggested price. If they discount the price, the manufacturer may decide not to distribute the product to the retailer in the future. Tom figured that he would win the competition if Mike purchased the audio system, so he gave a discount to Mike and added his own $100 for the sales record. Tom thought everyone wins – Mike got the audio system at a lower price, Tom became this year’s best salesperson and earned $900 in cash, and the store sold the audio system.

A) Who are the stakeholders in this case and how are they affected by this ethical situation? B) Was Tom’s action appropriate? C) If the action was not appropriate, what action would you recommend and why?