NAME:_______________________________________ SECTION:________

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

CASE ANALYSIS

Case 1. Ethics vs. Profit

A large American company participates in a highly competitive industry. To meet the

competition and achieve profit goals, the company has chosen the decentralized form
of organization. Each manager of a decentralized center is measured on thr basis of
profit contribution, market penetration, and return on investment. Failure to meet
the objectives established by corporate management for these measures is not
accepted and usually results in demotion or dismissal of a center manager.

An anonymous survey of managers in the company revealed that they felt pressured
to compromise their personal ethical standards to achieve the corporate objectives.
For example, certain plant locations felt the presure to reduce quality control top a
level that could not ensure that all unsafe products would be rejected. Also, sales
personnel were encouraged to use questionable sales tactics to obtain orders,
including offering gifts and other incentives to purchasing agents.

The chief executive officer is disturbed by the survey findings. In his opinion, the
company cannot condone such behavior. He concludes that the company should do
something about this problem.

Questions:

1. What are the ethical problems mentioned in this particular case and what are the probable causes of
these problems?
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________

2. Is it all right to do something illegeal or unethical to maintain the company’s image and profitability?
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
3. If you are the CEO of the company, what would you do and why?

_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
Case 2: Friendship in Business

Asia Pacific Sugar and Sweets Manufacturing Company ordered molasses from
Philippine-Hawaiian International Sugarcane Incorporated on November 5, 2000.
When the time for payment came, Asia Pacific company was not ready to pay due to
tight financial crisis it was experiencing. Mr. Rolando Gutierrez, the manager of the
said company is a friend of Mr. Frederick Dy, the owner of the Philippine-Hawaiian
Internation Sugarcane Incorporated. He talked with Dy and asked him if it was all right
for the payment to be delayed. For friendship’s sake, Mr. Dy agreed. It was only 20
days afterwards that the buyer offered to pay. The seller accepted the overdue
account and started delivering the molasses. Upon receiving the second shipment,
the production manager of Asia Pacific reported to Mr. Gutierrez that the molasses
did not meet the indicted quality in the invoice. Mr. Gutierrez ordered the molasses
to be returned. Enclosed in the invoice was a memorandum citing the reason why it
was returned. This action enraged Mr. Dy. Immediately, he canceled the contract and
argued that the delay of payment was a form of “breach of contract.”

Questions:

1. Was the action of Mr. Dy to cancel the contract legally correct and morally justified?
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
2. Is it appropriate to extend friendship in business transactions? Why or why not? Discuss your answer.
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
___________________________________________________
Case 3: Expired Gravy

Mang Toot’s fast-food chain has been known in the business not just only for its great
tasting food and excellent service but also for its cleanly prepared dishes. One day,
Emong, a service crew of Mang Toot’s Makati Branch, was preparing the gravy. He was
unaware that the starch he used was already expired. He only noticed it after some
time and the gravy had already been served to some customers. Knowing that it
might cause harm to the customers, he immediately told Bart, the branch manager
about it. Bart told Emong not to tell anyone about it, besides, no one is complaining.

Questions:

1. What is the moral issue in the case?

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2. If you were Bart, what are you going to do?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
___________________________________
Case 4: Shared IT Secrets

When employee Eric Pantaleion quit his job in 1995, IT Systems, his company, paid
little attention. Pantaleon was one of the several customer-service representatives of
the Laguna, Philippine-based computer company, and the turnover of responsibilities
in the department wasn’t smooth. Following an uneventful exit interview with human
resources officials, Pantaleion left the company to start a job with IT rival, Sampo
Computer, also based in Laguna.

It might have ended there. But when Pantaleion’s new employer begin taking away
IT’s market share, its top management started to be alarmed. After some checking, IT
learned that Pantaleion was using inside knowledge of IT’s customer lists to make
sales. Company officials also suspected he might be relying on IT’s customer
specifications and repair manuals.

1. Is keeping “trade secrets” still an ethical issue in the age of globalization and
advanced communication technology?
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
2. Is Pantaleon’s action unethical, e.g., using the customer list of his previous company for his new
company? Why or why not? Discuss your answer.
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________

3. If you were Pantaleon, would you also do the same thing as he did? Why or why not? Justify your answer.
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________

Case 4: The Confused Accountant

 Yvonne Pillar is a young accountant who came from a poor family. She was
recently hired by a big company called Chameleon Co.

When it was time to audit the accounting books of the company, Yvonne was
instructed by her boss to manipulate the numbers in order to reduce the taxes the
company will have to pay the government. The company official said that if she would
not heed the command, he would be terminated.

The employment condition that time was really tight and the chance of finding
another job is very minimal.

Questions:
1. If you were Yvonne Pillar, will you obey your boss? Why orwhy not?
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
2. Are you morally obligated to follow an order that is illegal?
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________

2. Explain the moral implications of the military slogan: “Obey first before you complain.”
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________