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An Analysis of 'Peter Green’s First Day'
Jessica Williams
The business ethics case “Peter Green’s First Day” presents the dilemma of recent college graduate Peter Green, who has just completed a training program for Scott Carpets and is out on his first sales call with his District Manager, John Murphy. Peter is taking over Murphy’s original sales territory (before Murphy was promoted), and he wants to make a good impression as the two of them call on an important client, Peabody Rug. To Peter’s delight, the owner of Peabody Rug agrees to a large sale but then makes a request for some “help on the freight costs.”
Later, Peter asks his manager what such “help” means and is told that Peabody will claim that some of the carpet was damaged in transit to the store. Peter would then be expected to falsify a damaged freight report for Scott Carpets’ front office, and Peabody would be given a discount equal to the cost of shipping the rolls of carpet back to the warehouse for replacement. Peter is told that this is standard practice in doing business with Peabody Rug, both for Scott Carpets and its competitors. Peter does not understand: “Basically, what you’re asking me to do,” he tells his manager, “is to lie to the front office.” The manager is furious with this characterization. Upset and uncertain, Peter returns home to his wife and newborn. He was raised to tell the truth; now, on the first day of his new, job he believes he is being asked to lie.
Robert Solomon, Professor of Philosophy and Business at the University of Texas at Austin, has written several books on business ethics. In his New World of Business: Ethics and Free Enterprise in the Global 1990s, Solomon defines ethics as “a way of thinking” about rules of behavior (62) that, if followed, can provide guidance in doing the right thing when confronted with dilemmas such as Peter’s. Solomon offers eight such rules, one of which is particularly helpful in thinking about this case: “Respect the customs and beliefs of others, but not at the expense of your own ethics” (65).
Completely new to the world of selling carpet, Peter is facing much the same dilemma he would face if he were doing business in a foreign country and were asked to pay a bribe to smooth a transaction. Bribe paying is considered illegal and unethical in the United States, but it is an accepted way of practice in other countries. According to Solomon, a payment behind the scenes may be “‘bribery’ in our system, [but it is considered] ‘supporting public servants’ in theirs” (65). On his first day at work, Peter is walking into a culture about which he knows nothing. In ethical matters, he has only the moral training of his youth to guide him, and if he uses that as his standard he will probably reject the lie and lose the order as a result.
But is the case that clear cut? If the principle by which Peter decides on his course of action is to respect the ethics of others without violating his own ethics, he has some careful thinking to do before agreeing or disagreeing to falsify the report. For instance, in the sales culture Peter is now entering, an important customer is not expected to pay full cost on large orders. The people in Peter’s position (in his company and in others) had given “freight assistance” to Peabody Rug for years. Who was Peter to say “I’m more moral than you” and jeopardize the business by refusing to accept a longstanding practice? As Solomon points out, “The most difficult kind of ethical thinking that people in business have to do concerns not a conflict between ethics and profits but rather the conflict between two ethical systems” (65).
Clearly two systems are clashing in this case: Peter’s schoolboy ethics and the established ethics of sales practices in the carpet industry. What should Peter do? Clearly he cannot lie. If he does, he will not be able to face himself or his wife. He will not be able to teach a code of ethical conduct to his child without feeling like a hypocrite.
There may be a way out of this dilemma if Peter can make a sincere effort, as Solomon says, to “[r]espect the customs and beliefs of others.” Peter might say to his District Manager: “Why don’t we just call the freight assistance what it is: a discount?” To the owner of Peabody Rug, Peter could say: “You are an important customer. You deserve a discount for your loyalty and willingness to buy a new line of carpet, and I will do everything in my power to get you one.” Finally, in a note to the front office at Scott Carpets, Peter could use this occasion to demonstrate his management potential. The training program he recently completed had been developed, after all, to attract future leaders for the company, and Peter could now act like one.
First, he could point out that the freight companies delivering carpet to Peabody Rug over the past several years could not, on every occasion, have damaged the goods—triggering an official report and a discount. Someone at Scott Carpets’ front office must have been aware of the practice and tacitly agreed to it. Second, Peter could propose a policy of granting discounts to leading customers and early purchasers of new carpet lines. When companies like Peabody Rug stocked a Scott carpet, other stores placed orders as well. The company could easily justify a discount for accounts like Peabody Rug and, in practice (though under the name “freight assistance”) had already done so.
In other words, Peter could respect the new sales culture in which he finds himself by taking the time to understand the people involved, their needs, and their ways of doing business. Rather than pronouncing a practice “wrong” because it disagreed with his personal morals, Peter could—if he took the time to think the problem through—take a course of action that would keep everyone involved happy: Peabody Rug would gets its discount, the District Manager would get credit for a large sale, Scott Carpets would continue to sell its product to a market leader, and Peter would earn a commission and, perhaps most important, not violate his personal morals.
This plan has its risks. In calling attention to falsified freight reports, Peter is exposing an action that will likely threaten his District Manager, who knew of previous falsified reports, and possibly anger or shock Scott Carpets’ front office if it had in fact believed all of the previous claims of freight damage. But Peter has little choice. He cannot lie and live peaceably with himself. If he wants to keep his job, he can make a bold move that respects, as Robert Solomon urges, “the customs and beliefs of others, but not at the expense of [his] own ethics.”
Works Cited
Solomon, Robert C. “Thinking Ethics: The Rules of the Game.” New World of Business: Ethics and Free Enterprise in the Global 1990s. Lanham, MD: Rowman & Littfield, 1994. 62-65.
Nash, Laura. “Peter Green’s First Day.” Harvard Business School Case 9-380-186.
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