Ethics dilemma: Rates for friends?

[Redlass]

The Institute for Global Ethics has several interesting ethical dilemmas posted on their site. One of them has to do with when it is appropriate to give discounts.

It begins (I'm hoping what little I quote here is fair use--I think I'll drop them an e-mail and make sure):

Samuel approves leases for Bayside Properties, a real-estate company. One day, Elaine, a real-estate appraiser, approached Samuel to inquire about leasing office space in one of the company’s buildings. Elaine had previously rented space in a Bayside’s building, but that building had been sold and Elaine had to find new space at the end of her lease. Samuel would like to rent to Elaine--she is not only an ideal tenant with an excellent credit record with the company, but Samuel knows that Elaine is in the position to speak favorably to others about the company’s good service and careful maintenance of their buildings. In addition, Elaine is a close family friend.

Samuel has the perfect space for Elaine coming available just when she needs it. The problem is, rental rates have increased quite a bit since Elaine signed her last lease with Bayside, and it is more than she wants to pay. Elaine asks Samuel for a break on the rent. What should he do?


The analysis and Samuel's solution is given here:
http://www.globalethics.org/dilemmas...a.tmpl?id=1052

In fact, I would encourage you to visit the site anyway, there are a lot of interesting discussions there.

But before you do, what do you think? Would you do it? Does it make good business sense to give Elaine a break on the rent?

[quasar]

I think it does make sense if he's going ot get some publicity/good pr out of it (from Elaine talking him up).

I also personally don't like making a profit off of my friends, so I will be much more inclined to give them breaks on rates if I do some freelancing or consulting for them, or if I sell them old gear. I was going to do a documentation project for a friend at less than 1/3 my normal rate last year (it fell through). Although I would have liked the money from my normal rate, I was willing to give a friend a substantial break and certainly would always feel comfortable with some price break given the personal relationship.

Off to read what he did now.

Janice

[theeye]

Looks like an interesting site. Much better, at first glance, than Randy, the Sunday Times Magazine's "Ethicist", whose column often leaves me shaking my head.

[magenta321]

I would let her have the space at the rate she could afford, if I had the authorization to do so (ie, if I was high enough up on the command to make such a decision). I think it's good karma, and I am one of those people who will do almost anything for my friends. My friends would do almost anything for me as well though, so I know in the end everything would be "even" in some way or another.

I would never look at it as deeply as they do here. When your friend asks you for something, you can't take hours to figure out cost/benefit. If it is a loss the company can bear to take, then do it. If it is not, then do not do it. And if you need to give your boss a reason why you did it, that's when I'd come up with this whole analysis.

Our department started giving patients copies of all of their tests. The reason for this, is that some people come back and ask for them, and it is a pain for us to find the case, load it, and rephoto it. So it was easier to give everyone copies, even though it's about $10 a sheet for film (x roughly 7 films per patient).

In truth, we did this because it was too much of a pain to load the cases. We were really only loading one or two patients a day, so in truth, it is a big loss to the company. However, my boss came up with some very obviously bogus answer about how it allowed us to work with fewer staff members, and get more patients in since we did not have to rephoto things anymore.

They bought the story, and she got a bonus.

[pluckyduck]

Fun problem!

I haven’t looked at the answer yet. Let me give a stab at it.

For me, the friend part can’t factor in a decision like this. When you are dealing with rental real estate, you’ve got a finite amount of inventory. What I sell to a friend at $100 is not available to be sold to a non-friend at $200. .

In my business, I have an infinite (for all intents and purposes) number of BIC pens that I can sell. No matter what discount I give a friend, I’ve still got BIC pens left to sell to a full paying customer. Not so in this situation. The difference can’t be recouped, and if there isn’t a business reason to extend the discount, then it isn’t a good choice.

The “recommendation” factor as a real estate appraiser may or may not be of value to the business. They don’t give enough information for me to evaluate that properly. Is there space that needs to be sold, or do spots rent out as soon as they are available? If spots rent quickly, the recommendation may bring no additional value to the business and therefore may not be worth offering a discount to Elaine. Jury’s out on that one.

The factors that spoke loudly to me as making a discount a good thing were:

1) She has an excellent credit history with the company. Having a tenant that you know will pay their bills promptly and on time is worthy of a discount right there. Collecting is a hassle. Cash flow is important.

2) A previous Bayside building got sold out from under her. Repeat customers are gold, and a sale in a situation like that can make for a dissatisfied former customer – that’s bad. Making good will is good…and so

The right thing to do is to give Elaine a reasonable discount, based on her previous track record as a desireable customer and as a “make good” for the inconvience of her having to move last time around.



Now I get to see how I did….

Andrea

[frazzledspice]

The article must have expired, because I couldn't get it to load.

Is there any difference in this situation and the practice, let's say, of giving senior citizens discounts at stores on certain days of the week or at restaurants and movie theatres?

In the case of the seniors, they are paying 10% less on Wednesdays for items that everyone else has to pay full price for.
Eating the same meals and enjoying the same movies that everyone else has to pay full price for.

In other cases, students might get discounts at various places.

In the media business, tradeouts are common, especially in radio. I run a small ad for a friend in my paper who has a great beauty salon, and we get free haircuts. Last time I got my haircut, she was taking care of a lady with an antique store, and, as the lady left, my friend asked, "How many more until my couch is paid for?"

I still have not completely figured out that beastly Quark program, and someone helps me out with it each month in return for free piano lessons for her son. Is this beneficial to me? Absolutely. What she spends two hours on, I'd probably have to spend 30 on. (Well, at least a lot more than she does.)

And to tell the truth, even if I learned every last bit of Quark, I am not a visually artistic person. I have a crooked eye. I still draw stick figures while my 7th grade daughter wins art contests.

This is beneficial for both of us.

[Redlass]

Just an fyi, I received this note from the site after requesting permission to use the scenario the way I did above:

Dear Ms. Redman,

Yes, you may use our dilemmas in your community forum. Please be sure to credit the Institute. Please let them know that if they would like any further information on our programs they can sign the guest book on our web site!

Thanks,
Julie Swindler

So if folks like this question, perhaps we could pull a few others from over there. We could discuss it here (or in the appropriate forum) and also see what they have to say.

[kurt_messick]

Institute for Global Ethics is a great site (and great organisation). I first heard of them when I was in the political science field.