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  • Las Vegas Construction: Ethical Contracting

    In December 2015, the head of supply chain management (SCM) at Las Vegas Construction Inc. was tasked with reducing operating costs by 25 per cent in order to deal with the fallout in Nevada’s construction industry from the global economic downturn. The SCM head had engaged the manager in charge of subcontracting to help with cost reductions. The subcontracting manager did find a way to reduce costs, but it turned out to be a questionable way. He had tipped off the three subcontractors with whom he had been working closely by providing them with confidential information regarding a target bid price for the labour sourcing process. When the bid prices were disclosed, even though Las Vegas Construction Inc. had reached its original cost savings goal, the SCM head had mixed feelings about the process. He wondered how to address this potentially unethical situation, and whether he should inform his superiors about it.
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  • Gravity Payment $70,000 Minimum Salary Company

    In April 2015, Dan Price, chief executive officer and founder of Gravity Payments, a private credit card processing and financial services company, announced that every employee would receive a minimum annual salary of US$70,000 over the next three years. Price said he was concerned about the increasing pay gap in the United States and news of his bold move went viral, causing debate over employee compensation plans and the wealth gap in society. At first, there was applause for his radical actions, causing an initial rise in new business. However, there was almost an immediate backlash both internally and externally. One senior worker at the company resigned, claiming that lesser-skilled workers would simply clock in and out while highly skilled workers were not similarly compensated with raises. A lawsuit was filed by Price's brother, a minority shareholder, who believed that the move would hurt the company. A number of clients left Gravity Payments while other companies criticized the move, saying it made them look stingy. Price attempted to tackle pay inequality by increasing salaries, but this created controversy. Employees were not the only stakeholders affected by Price's actions. What should Price do now?
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