Matters of Principle
We're a couple of days away from graduation, but I guess the learning experience here at the Asian Institute of Management continues. While the MBA program did try to teach us and evaluate us on theories and applications of financial, marketing, and management principles, there are principles that only life situations can test.
Situation 1: In jail, you were the manager of a pool of funds that was collected from the inmates for the group's benefit once every one is free. The group decided to organize and stage an arm-wrestling tournament.
The big group planned for 15 months and implemented the tournament, and with the help of jail guards, the arm-wrestling tournament ended up as a success. However, during the event, a very expensive belt owned the leader of the big group, was lost.
After paying for all relevant expenses, there were some money left from that fund. The inmates were now wondering what to do with the money-- some wanted to use it to buy tokens for the jail guards who helped make the event a success, some wanted the remaining money to be returned to the group, and some wanted to save the money for future events, despite the fact that most of the inmates were set to be released in less than a month.
However, the leader of the inmates was your best friend and there some of your buddies that wanted the money to be used to pay for the lost belt. After all, the arm-wrestling tournament would not have been possible without the leader's guidance.
The question: As the fund manager, what do you do?
Situation 2: You were the manager of a pet shop that sells guinea pigs. Your store implemented a 25% discount for purchases by customers that were relatives of previous buyers. Your store also gave rebates of fixed amounts to customers if they were able to take care of guinea pigs and make them strong and healthy. You have been drawing the ire of the store's owner lately because other pet stores in the neighborhood were selling more and yielding stronger pets. You were instructed to raise sales or get the boot in the next week.
One day, a customer came in the store. He was the son of a previous customer and he showed his pet guinea pig that was very strong and healthy. He was asking for the rebate. While the owner of the store did not explicitly tell you about overlapping benefits, you were sure that you would get the boot if you shelled out more money.
The question: Would you give the customer a rebate? If so, how much?