From the course: Values and Ethics: Case Studies in Action
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Customer focus vs. shareholder focus
From the course: Values and Ethics: Case Studies in Action
Customer focus vs. shareholder focus
- The customer is always right. Now, that's one of the oldest mottos in the business world, but you also have an obligation to do what's right for your company and its shareholders. And in some situations, you'll have to choose one of those sets of interests over the other. Let's look at one of those. Let's say you worked for a company that makes paper towels. And your biggest cost is the pulp that you make the paper out of, and the cost of that pulp goes up a little every year with inflation, so every few years, you have to raise your prices just to keep up. Well, let's say this year, you need to raise your prices by 5%. Now, you could just raise the price of each roll by 5%, but another way is to take 5% of the number of sheets off the roll. You keep the price of each roll the same, but it costs you 5% less to make it. And let's say that it's your decision which way to go. So you decide to meet with some of the people…
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