CH16 Apply Your Skills: Ethical Dilemma To Renege or Not to Renege? Early on, however, it became all too clear that Puget had seriously underestimated the time required to build new business relationships and the costs associated with the expansion, a mistake that was already ecating into profit margins. Even more distressing were the most recent figures for new housing starts, which were heading in the wrong direction. As Michael said, "Granted, it's too early to tell if this is just a pause or the start of a real long-term downturn. But lm worried. If things get worse, Puget could be in real trouble. Federico Garcia, vice president of sales for Puget Sound Building Materials, a company based in Tacoma, Washington, wasn't all that surprised by what company president Michael Otto and CFO James Wilson had to say during their meeting that morning. Last year, launching a major expansion made sense to everyone at Puget, a well-established company that provided building materials, as well as manufacturing and installation services, to residential builders in the Washington and Oregon markets. Puget looked at James looked at Federico and said, "Our lawyers built exactly what hed asked it to do. He prided himself on being a man of his word-someone others could trust. Could he 2. Recommend a meeting with the sales representatives entitled to a bonus and tell them that the company's deteriorating financial situation triggers one of the contingency clauses in their contract, so the company won't be issuing their bonus checks. Puget will just have to deal with the negative impact on sales rep go back on his promises? What Would You Do? 1. Recommend to the president that a meeting be arranged with the sales representatives entitled to a bonus and tell them that their checks were going to be delayed until Puget's financial picture darified. The sales reps would be told that the company had a legal right to delay payment and that it may not be able to pay the bonuses if its financial situation continues to deteriorate. motivation. 3. Recommend strongly to the president that Puget pay the bonuses as promised. The legal contracts and financial situation don't matter. Be prepared to resign if the bonuses are not paid as you promised. Your word and a motivated sales team mean everything to you.

CH16 Apply Your Skills: Ethical Dilemma To Renege or Not to Renege? Early on, however, it became all too clear that Puget had seriously underestimated the time required to build new business relationships and the costs associated with the expansion, a mistake that was already ecating into profit margins. Even more distressing were the most recent figures for new housing starts, which were heading in the wrong direction. As Michael said, "Granted, it's too early to tell if this is just a pause or the start of a real long-term downturn. But lm worried. If things get worse, Puget could be in real trouble. Federico Garcia, vice president of sales for Puget Sound Building Materials, a company based in Tacoma, Washington, wasn't all that surprised by what company president Michael Otto and CFO James Wilson had to say during their meeting that morning. Last year, launching a major expansion made sense to everyone at Puget, a well-established company that provided building materials, as well as manufacturing and installation services, to residential builders in the Washington and Oregon markets. Puget looked at James looked at Federico and said, "Our lawyers built exactly what hed asked it to do. He prided himself on being a man of his word-someone others could trust. Could he 2. Recommend a meeting with the sales representatives entitled to a bonus and tell them that the company's deteriorating financial situation triggers one of the contingency clauses in their contract, so the company won't be issuing their bonus checks. Puget will just have to deal with the negative impact on sales rep go back on his promises? What Would You Do? 1. Recommend to the president that a meeting be arranged with the sales representatives entitled to a bonus and tell them that their checks were going to be delayed until Puget's financial picture darified. The sales reps would be told that the company had a legal right to delay payment and that it may not be able to pay the bonuses if its financial situation continues to deteriorate. motivation. 3. Recommend strongly to the president that Puget pay the bonuses as promised. The legal contracts and financial situation don't matter. Be prepared to resign if the bonuses are not paid as you promised. Your word and a motivated sales team mean everything to you.

Foundations of Business (MindTap Course List)

6th Edition

ISBN:9781337386920

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter16: Mastering Financial Management

Section: Chapter Questions

Problem 1DQ

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