Title of Paper: Written Assignment Week 6

Student Name (Anonymous for Written Assignments)

BUS 5115: Business Law, Ethics and Social Responsibility

Denisia Dunmore (instructor)

Date 7/26/2022
Case: The Pizza Puzzle, Topic: Deceptive Advertising

Involved parties: George Hansen, General Manager of Augusta Marigold Inn, a subsidiary
of Hospitality Enterprises; Sharon Coombs, Food Services Manager, Augusta Marigold
Inn

Introduction

This case study of Pizza Puzzle concerns a company called Augusta Marigold Inn and its
managers (Mr. George Hansen: General Manager; Sharon Coombs: Food Service Manager) to
cope with the reduction of the room service business through the introduction of a pizza business
to the Inn. We will identify ethical issues related to this case, possible alternatives and
constraints, and finally a recommendation.

Case description

First, Sharon Coombs, who is the company’s food service manager, reported to George Hansen
that she noticed a decline in the room service business, the highest margin portion of her
operation. Sharon noticed empty pizza boxes of other businesses that competed with the Pizza
Market in their area, and immediately decided to install a pizza oven in the kitchen and offer
room service pizza to customers. Even though the company made quality improvements that
enabled them to say that customers could not differentiate between the tastes of the Inn Pizza and
other pizza shops, however, the room service provided by Sharon did not significantly increase
the sales.

Sharon’s proposal includes:

 Creating different brochures for each guest room, with a phone number different from
that of Marigold

 Each number will reach a different phone in room service, which will be answered with
"Napoli Pizza, authentic Italian pizza from old family recipes."
  Fabricating well-designed Napoli Pizza boxes for delivering room service pizza to guests.

 Giving branded hats and jackets to room service personnel for use in pizza delivery, the
room waiters and waitresses will wear these garments to deliver pizza. So they will
change to their regular uniforms for other deliveries.

Ethical issues related to this Marigold case

Firstly, George Hansen (the General Manager) should consider Sharon’s proposal as deceptive
advertising, which could potentially affect the company if they became famous based on this
false advertising.

Secondly, there would be a benefit to creating a different brand identity for the pizza boxes; it
could be a good marketing strategy that could increase sales. (Jiang, 2019) However, ethical
problems emerge in other strategies, such as misleading or withholding information from
customers or shareholders. So, these actions will not meet the requirement of an enforceable
contract where there is a right of free consent expectation in which the contract must be free of
mistakes or misrepresentation. (Carson, 2001)

Shareholders in this case

Sharon Coombs is the food service manager, and George Hansen is the general manager.
Employees of Augusta Marigold Inn, Shareholders of Augusta Marigold Inn, Customers of the
Augusta Marigold Inn, Augusta Marigold Inn competitors or community

Alternative ethics for this case

George Hansen can refuse Sharon’s proposal and lose the opportunity to grow the business of
room service.

Also, George Hansen looks at this proposal as a deceptive advertising approach, or George
Hansen could accept Sharon’s proposal with modifications to ensure full disclosure will meet the
ethical standards for disclosure – a win-win for both of them and Change brochures to reflect the
Marigold Inn's brand, such as "Marigold Inn's Napoli Pizza," or create a separate space in the
restaurant for Napoli pizza.

From an ethical standpoint, the utilitarianism approach holds that the most ethical option is the
one that produces the greatest good for the greatest number of people. No false advertising is
used, pizza will still be sold, bringing some cash flow, and the competitors are not affected.
(Jiang, 2019)

Another alternative is that Sharon’s proposal, which will gain their revenue, customers, and good
pizza tastes, may suffer, and there may be some reputation falling out. This alternative is against
the utilitarian customers are believe certain uncovered rights.

Practical constraints related to this case

George would possibly reject the utilitarianism approach if revenue is an option and accept one
of the other ideas. The option might need a cash injection to create a separate pizza space. Also,
another constraint would be that the company may continue its old pizza and customers would
still be dissatisfied with the taste of the pizza.

Recommendations George should take it

After researching the market, George Hansen should have noticed that his food service manager
wanted to develop a recommendation.

George Hansen may consider that Sharon’s reasoning behind the creation of a separate pizza
store was right and that they both wanted to satisfy guests.

George Hansen may agree with the proposal to create a new food business to increase room
service margin and, by extrapolation, the overall profitability of the August Marigold Inn.

Conclusion

In conclusion, the company’s decision to develop a new side business will allow the company's
market share to grow. (Jiang, 2019) So, I would suggest that the company give the go-ahead
ticket to establish new business space within the restaurant with ethical manners. Because it will
allow the business to grow the pizza side without higher fund costs. An effort will have to be
placed on marketing strategies to raise awareness of the pizza offer at the August Marigold Inn
not only to customers but to all shareholders as well.

Reference

Carson, T. (2001). Deception and withholding information in sales. Business Ethics Quarterly,

11(2), 275–306. https://doi.org/10.2307/3857750

Jiang, Z. J. (2019, November 26). Why withholding information at work won’t give you an

advantage. Https://Hbr.Org. Retrieved July 27, 2022, from https://hbr.org/2019/11/why-

withholding-information-at-work-wont-give-you-an-advantage