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 center is
measured on the basis of the profit contribution, market the objectives established by
corporate management for these measures is not accepted and usually results inn
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 pressure to reduce quality control to a level that could
not ensure that all unsafe products would be rejected. Also, sales personnel were
encouraged to used questionable sales tactics to obtain orders, including offering gifts and
other incentives to purchasing agents.

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

2. Is it alright to do something illegal 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 the
Philippines-Hawaiian International Sugarcane incorporated on November 5, 2020. When
the time for payment came, Asia Pacific Sugar and Sweets Manufacturing Company were
not ready to pay due to tight financial assets it was experiencing. Mr. Rolando Gutierrez,
the manager of the said company is a friend of Mr. Frederick 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 Sugar and Sweets Manufacturing Company reported to Mr.
Gutierrez that the molasses did not meet the indicated quality in the invoice. Mr. Gutierrez
ordered the molasses to be returned. Enclosed in the invoice was a memorandum citing the
reasons why it was returned. This action enraged Mr. Dy. Immediately; he cancelled the
contract and argued that the delay of payment was a form of “breach of contract.”

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? Discuss your answer.