Mississippi Sales, Inc

1 Pages Posted: 21 Oct 2008

See all articles by R. Edward Freeman

R. Edward Freeman

University of Virginia - Darden School of Business

Jenny Mead

University of Virginia - Darden School of Business

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Abstract

This case illustrates the dilemma of an employee who, having received an offer to go elsewhere (although to a noncompeting business), must decide where his loyalties lie.

Excerpt

UVA-E-0253

MISSISSIPPI SALES, INC.

I had worked as a salesperson for Mississippi Sales Inc. (MSI), a three-person firm, for almost a year. The company brokered plastic pipe and fittings to clients in Latin America and the Caribbean. MSI was a commodity business and its salespeople won clients not through price or service, but through personal relationships. Crisscrossing the company's territory, I was extremely successful at bringing in new customers and revenue. Many of the customers that I brought on board had a relationship only with me, rather than with the company or the other salespeople.

One of MSI's customers approached me about the possibility of the company selling a new product: stainless steel pipe and fittings (neither being a complementary nor a competing product line to MSI's plastic pipes and fittings). I discussed this with my employer, a close personal friend, but he was not interested in adding another product line. Disappointed, I began thinking about leaving MSI and starting my own company. I had no problem with the idea of selling stainless steel to the customer list I had built up at MSI, but I was not sure about selling plastic as well.

Starting my own company appealed to me, and I saw no serious impediment to doing so. I had no contract or any kind of non-compete agreement with MSI. I could find another plastic pipe and fittings supplier easily, and my customers would not have a problem keeping their business with me no matter what company I represented. I could certainly use the revenue from proven plastic pipe and fittings customers to help sustain this new venture until I could get the stainless steel sales going well. As brokers, employees leaving firms and taking customers with them was common practice. In fact, my current employer had obtained his customer list when he left another company several years ago.

However, my friendship with my boss, which predated my working for him by many years, began to worry me. Despite my eagerness to start my own company, which I was certain would be highly profitable, I felt uncomfortable about abandoning my friend and employer. Could I compete with him, as well as MSI, in good conscience?

This case was prepared by William Thomas (MBA '02) and Research Assistant Jenny Mead under the supervision of R. Edward Freeman, Elis and Signe Olsson Professor of Business Administration. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright ã 2003 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenpublishing.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation.

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Keywords: competitive dynamics ethical issues

Suggested Citation

Freeman, R. Edward and Mead, Jenny, Mississippi Sales, Inc. Darden Case No. UVA-E-0253, Available at SSRN: https://ssrn.com/abstract=908757 or http://dx.doi.org/10.2139/ssrn.908757

R. Edward Freeman (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
804-924-0935 (Phone)
804-924-6378 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/freeman.htm

Jenny Mead

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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