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NAME

Md. Sajadul Karim Kallal


Asif Wadud
Md. Farhadul Kabir
Mehedi Faruq

ID
2015-2-95-008
2015-2-95-046
2015-1-95-037
2015-2-95-063

Case Study on Centurion Media

Summary:
Centurion media is a company that is in the business of broadcasting/publishing
advertisement and commercials. The president of the Cable TV Division, Joseph Fowler,
created a contract with Northpark, a consumer of selling advertisement that has not been sold
by the parent company. Richard Bennett, a regional vice president in the Cable Division of
Centurion Media. Bennett was one of the people that received this contract without any prior
knowledge of the contract and was asked to deploy the content of contract. He was faced with
a serious ethical dilemma that would impact his career, family, and co-workers. He believed
that a contract executed by the new president of his division, Joseph Fowler, would cause
significant financial losses for Bennett's own division and the company. Bennett suspected
that Fowler might have a serious conflict of interest, since he owned stock and options in
Northpark-the company with which he had negotiated the contract. Bennett was only two
years from retirement. If he chose to protest the contract, it would likely have very unpleasant
consequences -- including jeopardizing his own financial security. He would probably be
fired. Additionally, his actions might endanger the careers of other employees and coworkers. The personal relationship between the CEO of Centurion Media, Chuck Reilly, and
Fowler made Bennett's decision more difficult. When Bennett contacted with the general
counsel and controller in the corporate office of Centurion Media, they suggested he back off.
He was surprised by their stance that the contract, which Bennett thought would be
financially disastrous, was in the best interest of the company. The Controller went so far as
to remind Bennett how near he was to retirement, emphasizing that he should be concerned
about protecting his job. If he chose to protest against the contract, he would probably be
fired. Bennett was convinced that If he did nothing, his own division and the parent company
would lose millions in revenues and profits.

1. What was the problem facing Richard Bennett?


Richard Bennett was facing problem with the new contract between Northpark Media and
Centurion Media.
The new contract was made with Joseph Fowler, who was hired as the President of the Cable
Distribution Division. Fowler was known for not taking negative remarks about the assigned
task in hand and he had authoritative personality. He fired all those who argued with him on
his decisions. With the new president in command, the contract was made between the
Centurion Media and Northpark Media. Under this contract, the sales of advertising inventory
would be made to Northpark Media at discounted prices; which would incur losses.
According to the contract, Centurion Media obliged to sell all the advertising at exceptionally
discounted prices to Northpark Media and 90 percent of advertisement that they would buy
must be run and if they would not run then, Centurion Media would be penalized and would
have to pay 5 times of the discounted prices of commercials.
It was also mentioned in the contract that this contract would not be cancelled and it would
automatically be renewed. The current contract between the top buyers of the commercials
would also be superseded by the contract made between the Centurion Media and the
Northpark Media. This also cancelled all the top paying contracts between the clients and the
Centurion Media. This loss of clients contract would result in a loss millions of dollars.

2. Do you agree with Bennetts assessment of the problem he faced? Explain


why do you agree or disagree with him.
Yes I agree with the Bennetts assessment of the problem he faced.
Reason for agreeing with Bennetts assessment of the problem he faced.

Sales of advertising inventory at discounted prices

Loss of current potential clients

Decline is revenue sources

Decline in revenue in millions of dollar

Financial assessment of the problem:


Centurion CableSoutheast Region, Bennetts Estimates of Ad Revenue Losses from Regular
Advertisers for One Cable System
Average Ad Revenue per Single Cable System
4 spots per network x 24 hours per day x 365 days per year

= 35,040 avails per network

Average of 50 cable networks carried on each system

= 1,752,000 total avails

Sold inventory in 2006 was 40 percent (unsold at 60 percent)

= 700,800 estimated spots sold

Average spot rates of $100 across all networks and time slots

= $70,080,000 average revenue

$70,080,000 x potential 5 percent avails lost to Northpark

= $3,504,000

Northparks rates discounted at 70 percent off regular rates

= $2,452,800 lost revenue


(per cable system )

Source: Centurion Media case page no. 10


From this information we can say that Centurion Media will incur a loss of million dollars.
Bennett thought that the contract performed through the new leader of his division Frederick
Fowler would cause significant financial deficits for Bennett's own division and the
organization. Bennett suspected that Fowler may have a significant conflict of great interest
since he possessed stock and options in Northpark the organization.

3. What are Richard Bennetts options for dealing with the problem?
Identify how Bennett might have applied several ethical theories in this
situation.
Richard Bennetts options for dealing with the problem are.

Bennett could have discussed the terms of the contract with Fowler and Reilly.
Bennett could have reported the problem to Chuck Reilly, CEO, Centurion Media.
Bennett could have let the situation take its course.
Bennett could have quit the job.

Ethical Theory: Provides guidelines for justification of right or wrong actions when settling
human conflict.
Utilitarianism: Utilitarianism act argues that in all situations the utility of an action is based
on an act that leads to the greatest good for the greatest number.
Bennett may act in accordance with Act of Utilitarianism, if he fights the contract.
Stopping the contract would create the most good for the most people.
If he dont stop the contract it will cause harm to the Company, Clients, Reputation,
and also have the effect in financial performance.

4. What was Richard Bennetts responsibility to his subordinates in assuring an


ethical work environment? In your opinion what ethical theory might have been
his motivation for creating an ethical work environment?

As a vice president of SE region Richard Bennett had some responsibility and impact on his
subordinates. Those responsibilities are given below:

Bennett was nearly 10 years with the same management team so he was emotionally

attached with the team members and had some influence over his subordinates.
Bennett had a responsibility to ensure an ethical work environment
Bennett had a responsibility to promote emotional security
Bennett had a responsibility to provide an opportunity for sustainability and growth
Bennett had a great responsibility to increase team focus on building relationship
Bennett had a responsibility to oversee the business activities of the southeast region
As Bennett fulfilled his responsibilities as a team leader, his team was recognizes as
an Outstanding Team nationwide.

In our opinion, we think Duty of care theory and Utilitarianism theory should have been his
motiviting to ensure or to create ethical work environment for his company. Duty of care
theory says to give benefit or importance to a particular person or a group. So Bennett should
need to take such a action which goes with his subordinates. In this case, if that deal/contract
would happened then company will face financial loss and might be the only one person
(Joseph) dealing the contract would get benefited. So here Bennett should think about his
subordinates interest not Josephs. Utilitarianism theory says a general term for any view
that holds that actions and policies should be evaluated on the basis of the benefits and cost
they will impose on a larger group of people. That means Bennett should have to think about
his subordinates benefit not the only one persons (Joseph) benefit.