Case Study

Timmco Case Study

Timmco, Inc. is a publicly-traded corporation located in Denton, Texas that makes and sells high-pressure industrial spraying equipment used in all sorts of commercial liquid spraying applications. It prides itself on top quality and promotes its products as “100% made in the USA”.

Sales have been declining recently due to competition from lower-priced competitors and Timmco is looking for ways to reduce costs. One option under consideration is to find a new source for the high-pressure valves used in its products. These valves are complicated mechanisms that operate under very high internal pressure. If the valve was to burst, it would spray pieces of metal in all directions and pose a significant hazard to anyone standing nearby including the operator of the equipment. Timmco currently has a contract to purchase 1,000 valves a year at $2,500 per valve from Blagg Industries, a small privately-owned business located in Boone, North Carolina. The contract has been in place for three years and has two more years to run.

Blagg Industries has a dozen employees. Timmco is its primary customer. If Blagg Industries loses Timmco’s business, it will have to lay off employees and might even go out of business.

Timmco is considering outsourcing the valves from Sanco, an overseas supplier in the country of Slawrovia, instead of buying valves from Blagg Industries. The Sanco valves only cost $1,000 each, but are known to be of lower quality than the Blagg Industries valves and are more likely to burst. Sanco can supply these valves at such a low cost because they pay their workers, including children, less than the equivalent of $5 per day and work them long hours in hot, dangerous conditions.

Slawrovia is a poor country, but it has a large government bureaucracy and there is a lot of red tape involved in getting approval to export manufactured goods to other countries. In fact, it might take more than a year for Sanco and Timmco to obtain the necessary approvals for Sanco to export the valves to Timmco. Fortunately, the CEO of Sanco is related to the Slawrovia Minister of Commerce and has told Timmco that the necessary approvals can be obtained in less than a week if Timmco makes a $20,000 “gift” to the Slawrovia Minister of Commerce.

In addition to finding a new, low-cost valve supplier, Timmco plans to increase sales by running a new marketing campaign that focuses on their commitment to American made quality. The tagline will be “Made in the USA by Americans, for Americans.”

You are a high-level executive at Timmco. Analyze the legal and ethical issues presented by the Timmco scenario. Your legal and ethical analysis should include breach of contract and remedies, negligent torts, product liability, the Foreign Corrupt Practices Act, and deceptive advertising and should incorporate a discussion and application of one or more of the ethical theories from Chapter 4 of the course textbook Business law: The Ethical, Global, and E-Commerce Environment.

Your legal and ethical analysis should,

Analyze breach of contract and remedies
Analyze negligent torts
Analyze product liability
Analyze the Foreign Corrupt Practices Act
Analyze deceptive advertising
Incorporate a discussion and application of one or more of the ethical theories from Chapter 4 of the course textbook Business Law: The Ethical, Global, and E-Commerce Environment.
The Timmco Case Study Final Paper

Must be eight double-spaced pages in length (not including title and references pages and formatted according to APA style
Must utilize academic voice.
Must include an introduction and conclusion paragraph. Your introduction paragraph needs to end with a clear thesis statement that indicates the purpose of your paper.
Your legal analysis should follow the IRAC method.
Must use at least seven credible sources in addition to the course text.
Must document any information used from sources in APA style.
Utilize correct APA formatting for legal sources include case law and legislation.
Avoid over-dependence on direct quotes.
Must include a separate reference page that is formatted according to APA style.

United States Consumer Product Safety Commission (Links to an external site.). (www.cpsc.gov/)

This website provides information about the United State Consumer Product Safety Commission and may assist in the Final Paper.
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Chapter4.docx


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