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This note was prepared by Professors Kenneth A. Merchant (University of Southern California) and Wim A. Van der Stede (London
Marshall School of Business
University of Southern California
The Expiring Software License
Teaching Note
Purpose of Case
This case was written to motivate a control-related ethical discussion of a relatively common
type of circumstance, where a manager knowingly violates company policy for a noble purpose.
Suggested Assignment Questions
Did Jimmy Wu act in an ethical manner in using his purchasing card to renew the Citrix
software license?
Case Analysis
Determine the facts:
Who, what, where, when, and how:
Jimmy Wu is an information systems manager.
Merchant & Van der Stede, Management Control Systems, 3rd edition, Instructors Manual
425
Define the ethical issues:
Stakeholders: Jimmy Wu
Ethical issues:
If Jimmy solves this problem by splitting the invoice, everyone seems to benefit in the short
run. However, there are some subtle costs. This situation might erode Jimmys personal moral
code and perhaps that of others if they learn about what happened. Jimmy violated company
policy in this circumstance and got away with it. Might he violate another policy in the future?
Where will he draw the line? Jimmy is also covering a mistake he made. Does his supervisor not
have the right to know that this mistake was made?
Decision alternatives and their probable consequences:
1. Ask the vendor to split the invoice and use the purchasing card to solve the problem, as
3. Ask Citrix to extend service while the payment was being processed.
Compare the alternatives with the ethical principles and choose the best
alternative:
Did Jimmy act ethically? Major ethical principles:
2. Fairness
4. Virtues
Merchant & Van der Stede, Management Control Systems, 3rd edition, Instructors Manual
426
The best ethics discussion is provided in discussing the tradeoffs between decision alternatives
#1 and #2. Thus, instructors should try to shut off the other options.
If students suggest option three, add the following assumption: SWI was a notoriously slow
payer. The last time SWI asked Citrix for a similar extension, it actually took the SWI
purchasing department several weeks to pay the invoice. Citrix personnel were quite annoyed at
this delay.
Pedagogy
Assuming instructors can keep the focus on the two main decision alternatives; the only special
challenge that might be faced is in helping some students understand what a purchasing card is
and why companies use them.
