Caselet 2: Callahan Car Parts Tommy Callahan took over the manufacturing firm Callahan Car Parts after his father died of a fatal heart attack. The company had 12 salespeople, each responsible for a...

Caselet 2: Callahan Car Parts

Tommy Callahan took over the manufacturing firm Callahan Car Parts after his father died of a fatal heart attack. The company had 12 salespeople, each responsible for a region of parts stores. The firm also has two account executives who handled the big parts retailers, either NAPA or O’Reilly’s. Callahan’s three manufacturing plants in the United States were unionized, but its sales force was not. The company has never had many complaints about its salespeople. However, one of its competitors had been hit with a multimillion-dollar fine for resale price maintenance (setting minimum prices its distributors could charge for its products). The competitor’s lack of policies prohibiting the practice was cited as a contributing factor, which made the fine much larger than it would have been otherwise. Tommy trusted his salespeople, but he knew that without an effective ethics policy and a procedure for investigating complaints, Callahan’s was at risk. So he asked three of his senior salespeople, the firm’s vice president of human resources, and the company’s attorney to form a committee and set up policies and procedures. The sales staff, however, revolted. “We’re honest people—we don’t need this!” they claimed. Worse, one of the senior salespeople told Tommy privately that if the policy were truly effective, it might identify some real problems Tommy would rather not learn about! What type of approach to monitoring, investigating, punishing, and improving ethics policies should Tommy suggest to the committee? What should he do to get salespeople to support the need for clear ethics policies?