CASE 2.

2:
SALES ETHICS:
A CASE STUDY

Submitted to:
Mr. Freddie Serapio, Sr.

Submitted by:
2MKA
Yu, Hannah Grace
Navales, Kristian
Chua, Charmaine
Betanio, Marianne
Alimbon, Marmie Grace
I. Situational Analysis

PSI has been a major supplier in the pallet overwrap market. Due
to the bright prospects for the pallet over wrap market (together
with the stagnation of the shredded film market), the management
of PSI has informed their salesforce that they have decided on the
following:
1.) limiting of the production output and marketing
activities of shredded film and
2.) product expansion output and marketing emphasis of
pallet overwrap film.

As a result to the drastic changes of business plan, there have

been many unwanted and unexpected events that occurred. For
one, a terrorist group had sabotaged one of their plants that may
have crippled the rate of production. A second event transpired. A
trade clash with several oil producing nations erupted. This caused
almost immediate raw material shortages for all PSI products.

All these happenings have resulted to the buyers’ clamor for justice
on their part as consumers.

II. Problem

The management of PSI has embarked on a new adventure of re-

establishing their company’s gameplan. However, due to the
impulse decision made by some of the pioneers of such plan, a
number of unexpected events occurred. The question we came up
with is: “How can ethical behavior affect business strategies?”
III. Areas of consideration

The areas to consider are the following:

a. PSI has a mother company (subsidiary by an international oil

company)
b. Branches of the said company were forced to adapt abruptly to the
newly established business plan by the management.
c. Braxton is “new to the game”.
d. Chandler does not consider other’s opinion.
e. The refusal of shredded film accounts to terminate their business
transactions.
f. The turning over of responsibilities to people
g. Underestimating possible occurrences that might affect production
h. Overestimated the company’s ability
i. Occurrence of an unexpected disaster (with human untervention)
j. Support from other 4 plants to be able to cover the loss
k. A trade dispute with several oil-producing nation causing immediate
raw material shortages.
l. Scarce resources
m. Written guarantee to provide company’s product without any
specifications
IV. Alternative courses of action:

1.) All managing staff personnel from all branches should

be included in meetings which are concerned with
business approach for them to be able to voice out
their opinions and concerns. They should come up
with a solution that would benefit all including buyers.
2.) The management should give notices to every branch
and every customer that there would be a change in
how the business would operate.
3.) The staff of the said company should prepare
contingency plans for possible events to avoid the
incapacitation of the company’s operations.

V. Recommendation

Chandler should re-evaluate his actions and set a good example for
his subordinates instead of showing unethical behavior. He should
be a model for his co-workers and those under him for the
company’s and their own good. Also we recommend that the
management mull over the alternative courses of action we have
stated.
Questions:

1.) An ethical issue exists when there is a question of whether an action is

right or wrong. List the issues that, in your opinion, are ethical issues in
this case.

There are a lot of unethical behaviors cited in the case study. For one,
Chandler did not consider his constituent’s opinion. Chandler also
passed the customer’s lawsuit problem to the lawyers instead of
controlling the situation first. He also disregarded the importance of the
customers to the company even if they were marginal. This action is
considered discrimination to the marginal consumers of their product.
Considering that Chandler is part of the company, the company did not
contribute to a positive relationship with the community. The
purchasers weren’t updated on what was happening to the company,
instead, some were rudely treated as to means of rapport with PSI.

2.) In terms of the SCPS Code of Ethics, how would you evaluate Braxton’s
actions?

Even though Braxton disagreed on the new business plan, he

wasn’t persistent on making his point. He kept quiet about his
knowledge that there are possibilities that their operations would
result to danger or failure. He had violated the principle: “Not
engage in any activities that will either jeopardize or conflict with the
interests of my company. Activities that may be or which may
appear to be illegal or unethical will be strictly avoided. To this
effect I will not participate in activities that are illegal or unethical.”
3.) In terms of the SCOS Code of Ethics, how would you evaluate Chandler’s
actions?

Chandler has violated almost all the principles that outline minimum
requirements for professional conduct, making him very unethical.

4.) How should the affected customers now be treated to minimize the
damage to both PSI and to the customers?

They should be given what they demand. Also, those whose

relationship has been terminated with the company shall also have
the power to choose whether to build rapport with the company
again or to look for their company of choice.