Objectives
This assignment addresses, in part, some of the following objectives for the course as outlined in the course specification:
review and analyse the role of engineers as managers
evaluate the characteristics of effective management control, including elements of operations and financial control
distinguish and discuss the social and legal responsibilities relating to product liability and professional negligence
determine appropriate methods of protecting intellectual property for specific situations
apply the concept of ethics, and select and justify suitable ethical guidelines for specific situations, using as a basis the Engineers Australia, Code of Ethics.
CASE: Frozen Food Cabinets
Fred Merton is a professional engineer and is a chartered member of Engineers Australia. He is employed by CoolIT Engineering, a small consultancy firm that specialises in the areas of fault investigation and project management. CoolIT’s office is in Brisbane, Queensland. Fred is responsible to the General Manager of the company, George Greener. George is an accountant by background and has been with the company for sixteen years. Fred commenced employment with the company approximately twelve months ago.
CoolIT was engaged by the BuyCheap supermarket chain that has 95 stores throughout the country. BuyCheap was experiencing problems with their frozen food cabinets. The problem was that certain areas of the cabinets did not appear to keep the food at the required temperature with a subsequent defrosting of the food and premature perishing of goods. The cabinets, 243 in total, were all manufactured by CoolRight Refrigeration Company during the period 1996 to 2001. Unfortunately CoolRight went bankrupt in 2003 and so repair of the cabinets by the original manufacturer was not possible.
CoolIT’s investigation of the problem, under Fred’s direction, involved the services of Dr Klaus Freezer, a private consultant and expert in refrigeration mechanics, and personnel from the Faculty of Engineering at the Centenary University located in Sydney, Australia. It was resolved that the problem was due to a design fault in the refrigeration piping in certain areas of the cabinets.
BuyCheap was satisfied with CoolIT’s initial investigation and engaged the firm as the project managers to correct the problem. Fred was appointed Project Manager for the repair project. Fred prepared contract documents and called tenders for the work. The source of the problem and its method of repair varied between cabinets, as CoolRight originally used a number of different methods of installing the piping. Unfortunately all the cabinets look the same on the outside and it is only when the cabinets are dismantled that the actual method of repair can be ascertained. For this reason, the contract pricing was based upon a rate per cabinet plus a sum based on the actual type of repair for a particular cabinet.
The contract was won by FixFrig, a nationwide refrigeration repair company with repair facilities in each state of Australia.
- FixFrig has been working on the cabinets for three months and to date 102 of the cabinets have been repaired and a further 25 are currently under repair. Fred’s dealings with FixFrig have been with the National Repair Manager, Sam Sneeze. Sam also, coincidentally, happens to be Fred’s brother-in-law. Sam’s office is also located in Brisbane. Fred has recommended payment of repairs on the 102 completed jobs and a progress payment was made by BuyCheap to FixFrig three days ago.
Two weeks ago Fred received an anonymous letter from Western Australia from a person who claimed to be an ex-employee of FixFrig. He mentioned in the letter that he was fired from his position as refrigeration mechanic because of a difference of opinion with his supervisor. The difference of opinion resulted from the fact that he considered the method of repair being used by his firm would fix the fault in the short term but had the potential to cause serious leakage of gas into sections of the cabinet in the future, and this could lead to food poisoning of goods in the cabinet. The contamination of goods would be likely to go unnoticed by customers with the potential that they could consume the goods and become seriously ill. If children or elderly people were to consume the food it could perhaps prove fatal.
Three days after receiving the letter, Fred took the matter up in a meeting with Sam Sneeze which was also attended by CoolIT’s general manager, George Greener. Fred outlined the general problem to Sam but did not show him the letter. Sam assured Fred that all repairs were thoroughly checked, in accordance with FixFrig’s quality control procedures. George made some comment about not being able to trust the reaction of ‘former disgruntled employees’ and the matter was not pursued further. Sam also mentioned, quite worriedly, that FixFrig was having some “temporary trading difficulties” and that it was important for the company to proceed as quickly as possible with the repairs to ensure adequate cash flow. After the discussion Sam took Fred and George Greener out to dinner at the best restaurant in Brisbane to show, as Sam put it, “how valued their friendship and business was”.
Today, Fred has received a letter from a BuyCheap manager in Melbourne expressing his concern about what he perceived as inadequate repairs to the cabinets in his store. He also expressed concern at finding some drops of liquid mercury in the bottom of one of the cabinets after the FixFrig mechanic had finished his repair work.
In addition, Fred heard on the midday news a report of a child in Sydney having died after eating contaminated frozen food. The news report said that the source of the food had been traced back to a BuyCheap supermarket store.
Identify and discuss the management, contractual and ethical issues involved in this case. What are Fred’s liabilities in this case? What course of action would be appropriate for Fred to follow, both immediately and in the longer term?
Notes:
(i) Marks will be allocated in the following way:
Identification and Discussion of Issues: Maximum 100 marks
Identification of courses of action: Maximum 100 marks
Written Communication: Maximum 100 marks
Total Maximum 300 marks
