Reference no: EM133189661

Mr. Saran Prasad is a resident of Punjab, India. He is in the business of manufacturing washing soap and edible mustard oil. Both are sold in the market through their own retail stores and through distributor network. Their products are well known in the market for their quality. Their retail stores was started by his grandfather. Subsequently his father also managed the same business which is now 30 years old. The brand name of washing soap is "Bright". Washing soap business is doing well. There are two brands in mustard oil viz., "Krishna" and "Rama". Krishna brand is more popular as compared to Rama. It is in the mustard oil business, Mr. Prasad is facing an ethical dilemma. at the same time and these two need not be mutually exclusive objectives for an organization.

The oil from tankers (30 drums / 5 tons) is tested manually by the supplier. In the absence of laboratory the testing of oil from tanker is not done again. The nearest oil testing facility is 140 kilometers away. Lately, the margins are increasing on the sale of oil from tankers than their own production facility. How to increase profitability? There are many manufacturing units of Mustard oil in that district. They all blend mustard oil to reduce cost. The soybean oil from USA which is yellow and odor less is imported and is mixed with mustard oil. All the units in that area are following this practice. This blending of oils reduces the production cost. Some units also do not do billing properly. This results in avoidance of VAT. The dilemma faced by Mr. Saran Prasad is whether he also should stop billing and start blending mustard oil like everybody else?

Question : If you were Mr. Saran, what should you do? Identify THREE (3) main factors leading to ethical dilemma. Provide your rationale. Provide TWO (2) recommendations to Mr. Saran to achieve better outcome.