Case: Sales Ethics: A Case Study" Background
Packaging Systems, Incorporated (PSI), a wholly owned subsidiary of an international oil company, is a major supplier of polyethylene film to various industrial and agricultural markets. In the past, a primary product has been a shredded film that is used for soil erosion control by farmers and commercial landscapers.
In recent years, PSI has become a major supplier in the pallet overwrap market. In this application, film is used to secure a product or products to a pal¬let for shipping. Compared with PSI's other mar¬kets, growth and profits in the pallet overwrap market have been outstanding. The bright prospects for the pallet overwrap market coupled with the stagnation of the shredded film market has led PSI management to make the following decisions: (I) limit production output and marketing activities of shredded film and (2) expand production output and marketing emphasis of pallet overwrap film.
The PSI salesforce was informed of the shift tit emphasis in a memo from Bill Chandler, the sales manager for industrial and agricultural products (see Exhibit 2.10).
Current Situation
Jeff Braxton is the PSI sales representative in the Chicago area. He had given Chandler's memo a lot of thought before he reluctantly began to implement his sales manager's suggestions. During his weekly phone call to Chandler, Braxton had voiced some of his objections.
Chandler: So, Jeff, how is the shredded film cut¬back and pallet ovcrwrap expansion coming along in Chicago?
Braxton: O.K., I guess, but personally, I have some problems with it.
Chandler For example?
Braxton: Some of the shredded film accounts arc refusing to roll over and play dead. They arc saying that we can't cut them off, and a couple have been pretty hostile. They're talking lawsuit, Bill.
Chandler. That's out of your area of concern, Jeff. Let attorneys worry about that. Besides, I doubt many will sue when they consider the legal and financial resources of our parent company.
Braxton: Whatever you say, Bill. The other thing that bothers me is the written guarantee to provide pallet overwrap film. Seems to me that there could be shortages, strikes, or fires that could prevent us from following through on the promise to supply film.
Chandler: Highly unlikely, Jeff. You arc worrying too much. You're new to the game. Do your-self a favor and follow my suggestions. Braxton: Well, you're the boss.
In the past 30 days, several events had complicated the PSI strategy. An explosion and resulting fire had destroyed all the pallet overwrap produc¬tion equipment and inventory in one of the PSI plants. A terrorist group had declared its responsibility for the explosion. PSI sales representatives were instructed to tell their accounts that the damage was minimal and that supply and service levels would not be affected. PSI management hoped to use production from the other four plants to cover the loss until rebuilding could be completed.
Fifteen days after the crippling fire, PSI received another severe blow. A trade dispute with several oil-producing nations erupted. This caused almost immediate raw material shortages for all PS1 prod-ucts. The matter was now becoming unpleasant for PSI. Braxton's phone call earlier in the day was the first of many bearing bad news for Chandler.
Braxton: Everybody out here is either hostile or not speaking at all. The grapevine is buzzing and practically all of our accounts know about the cover-up on the fire. Maybe that's what is making them take such a hard line on their guaranteed source of supply deal. The consensus is that we guaranteed the source of supply in writing and did not cite exceptions such as fires and trade disputes. Their message to me is, "You get the product, or we sue. We don't care where you get it, even if you have to buy from one of your competitors and resell it to us, and remember we want the competitive price you promised. Anything short of this, and we'll never buy from you again."
Questions
I. 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.
2. In terms of the SCPS Code of Ethics (Exhibit 2.7), how would you evaluate Braxton's actions?
3. In terms of the SCPS Code of Ethics (Exhibit 2.7), how would you evaluate Chandler's actions?
4. How should the affected customers now be treated to minimize the damage to both PSI and to the customers?
Your Assignment it 1 relates to chapter 2 "Building Trust and Sales Ethics" Case Study. Please make sure that you read the chapter thoroughly and then read the Case 2.2 "Sales Ethics" in page 58-59, and answer the following questions related to the case. Your answers must be written (APA) format (font style and size, margins,spacing and referencing). Please submit a cover page, each question in a page by itself, a references page and do not forget to reference your in-text.
Your writing content must be at least 300 words per question.
-An ethical issue exists when there is a question of whether an action is right or wrong. List issues that in your opinion, are ethical issues in this case.
- How would the affected customers now be treated to minimize the damage to both PSI and to the customers?