Silicon Valley Business Ethics Cases
When Equality Compromises Efficiency
Saayeli Mukherji, Hackworth Fellow 2013
Ralph was a sales representative of a small but fast-growing mobile and social advertising platform. Working directly with the co-founder, Mike, Ralph was responsible for door-to-door sales, pitching the company's platform that helped clients gain a virtual following of customers.
The business owners in the area often spoke English as a second language, making clear communication between the two parties a key concern for Ralph.
On one sales call, Ralph approached a small hair salon and secured a contract along with a $100 signup fee. However, the situation soon turned sour, as the hairdresser was furious after learning that she would have to operate the online platform herself, as opposed to the full service deal she thought she had signed.
Mike, Ralph's boss, now found himself stuck in tough situation. Ralph claimed that he was blatantly clear what the contract was offering, though mentioned communication was strained due to the language barrier. Under the company's philosophy of putting the customer first, Mike refunded the $100 signup fee and voided the contract.
This was not the first time Mike had to refund a contract under these conditions, causing Mike to revisit both the contract and Ralph's sales pitch to ensure that the language was a clear as possible. After this incident, it was clear that adjustments have not made an impact, and the company continued to lose money on negated contracts and time wasted not pursuing interested customers. Mike began to consider redrawing their target areas away from those where English is not the predominantly spoken language, but is concerned that would be an injustice to those potential customers.
Should Mike make the decision to work only with English-speaking customers? Is that an ethical solution? Are there any alternatives?