The "Scruples Methodology"

Chapter 2. The McDougal Fiasco

The headline of the second article read, “Local Supplier Sued ($5M) For Knowingly Shipping Defective Product.” The body of the article was as follows:
Martletts Inc., Chicago IL, has filed a lawsuit in district court against local supplier Stevens Inc. of N. Chester. Court documents revealed that Martletts was suing to recover damages due to defective merchandise knowingly shipped from Stevens.

The Martletts' company representative revealed that they were taking this unusual action due to evidence discovered during an audit at Stevens. Internal documents revealed that Stevens had lied about the product status and had shipped product they knew to be defective in order to avoid missing a contractual deadline.

Specifically named in the suit were the company president, Steven Lowe, and general manager, Gary Busche. No one at Stevens was available for comment.


This second article stopped Tom dead in his tracks. The hair on the back of his neck was standing up. He re-read it a second time, and this time, he mentally substituted the words, McDougal for Martletts, and then the name of his company for Stevens. His mind went numb when he substituted his name for Stevens’ general manager, Gary Busche.

Unfortunately for Tom, making those substitutions was an unbearably easy thing for him to do. A little over 45 minutes ago, he had made the final decision that tomorrow morning they were going to do exactly what Stevens had done. They were going to intentionally ship defective product to McDougal and wait for them to find the problem.

Tom’s personal logic had been, that by the time McDougal found the problem, the numbers for this quarter would already be posted. For Tom, this would make it his best quarter yet. He couldn’t pass up that opportunity to continue to make a name for himself.

During the day, no one had escaped the pressure, as they all knew how badly he wanted to make this shipment. At the end of their third unproductive meeting that day, Tom finally said, “If we ship the product then that would do three things: 1) Give us the opportunity to order replacement parts and get them in. 2) Stop McDougal from counting the shipment as late. 3) Give McDougal the opportunity to repair the parts themselves, like SyTech had done last quarter.


This last point had actually resonated with the team. Last quarter they had unknowingly shipped some defective product to SyTech. SyTech had needed the product so badly that instead of returning it they repaired it themselves. Best of all, SyTech hadn’t even asked for a partial refund and ended up paying for the shipment in full.

After reminding them about SyTech, Tom had finished by saying, “Since we don’t have replacement parts anyway, McDougal isn’t going to get working units any faster, whether we ship them today or not. At least this way, when McDougal tells us to repair them, we won’t have to tell them that there is a six-week lead-time. Hopefully, by the time they find out, we can have the replacement parts in-house.” 

Since nobody could come up with a better option, it was agreed that they would ship the product in the morning. Tom had been confident that he had made the right decision. That was, until he read the article. Now he had no idea what to do.



For Chapter 3, click here