MC Case Analysis

CASE 8: The manager of a medium-sized city asked your firm to conduct a position evaluation program for all the employees in the public works department. He indicates that he has favorable knowledge of your firm in this area but suggests that the citizens of the city and the employees as well, have little, if any, knowledge of your firm. He therefore suggests retaining a specific public relations firm to assist in giving your organizations higher visibility. He suggests that you should spend approximately 10 percent of the total fee, which would be agreed upon in advance, for this public relations effort. Is it ethical to accept this arrangement? I.

SUMMARY OF THE CASE

The consultants were asked to conduct a position evaluation program for all employees in the public works department. The client suggested retaining a specific public relations firm to assist in giving our organization higher visibility among the citizens, as well as the employees, since they have little knowledge of our firm. Also, he suggested that we should spend about 10% of the total fee, which would be agreed upon in advance, for this public relations effort. II.

III.

IV.

V.

ASSUMPTIONS - Ay be The manager suggested the service of the public relations firm since he will receive a commission on the 10% fee. - The manager suggested the service of the public relations since he will have a commission on the fee. The consultant has no knowledge of the commission that would be receive by the manager. DILEMMA - Pecuniary Interest vs. Integrity and Objectivity - Whether to accept the offer of retaining a public relations firm to build – up the visibility of our firm….. knowing that the 10% would be deducted from the total fee. ETHICAL CONSIDERATIONS AND PRACTICE STANDARDS APPLICABLE - Objectivity would be impaired since there would be conflict of interest with regards to the manager. - Integrity – Since it was assumed that the manager will receive a commission out of the public relations firm;s fee, the manager then would be impairing his integrity since he suggested the arrangement with the commission that he will received in mind if it will be accepted.

ALTERNATIVE COURSE OF ACTION - Accept the engagement to conduct a position evaluation program but decline the offer or the suggestion of the manager to engage the services of a public relations firm.

VI.

o It is unethical for the consultant to pay a commission for the - Decline the engagement. BEST COURSE OF ACTION

Retaining a public relations firm would be favorable to the consultants since it may increase the market of the firm thereby getting more clients. Also, since the client offered to in

This arrangement is not acceptable under professional ethics. A consultant should not pay a fee or commission to obtain a client or franchise a business practice. The fact that the client came first and the commission came second in this case makes no difference. The commission is being paid to franchise a business practice. The consultant who was faced with this situation accepted the engagement. After it was completed and he had paid the fee to the public relations agency, it was discovered that the city manager’s brother owned the public relations agency. This disclosure was made in conjunction with the city’s audit. The consultant willingly cooperated with the attorney in prosecution of the case. The matter was brought to the ethics committee and, while the consultant was in violation of the ethics code, he was discharged with a reprimand. His willingness to assist in the prosecution and the fact that he was not prosecuted in the case were significant in this decision.