American Products corporation participates in a highlycompetitive industry. In order to meet this competition and achieve profitgoals, the company has chosen the decentralized form of organization. Eachmanager of a decentralized investment center is measured on the basis of profitcontribution, market penetration, and return on investment. Failure to meet theobjectives established by corporate management for these measures has not beenacceptable and usually has resulted in demotion or dismissal of an investmentcenter manager. An anonymous survey of managers in the company revealed thatthe managers feel the pressure to compromise their personal ethical standardsto achieve the corporate objectives. For example, at certain plant locationsthere was pressure to reduce quality control to a level which could not assurethat all unsafe products would be rejected. Also, sales personnel wereencouraged to use questionable sales tactics to obtain orders, including giftsand other incentives to purchasing agents.The chief executive officer is disturbed by the surveyfindings. In his opinion, such behavior cannot be condoned by the company. Heconcludes that the company should do something about this problem.Instructions:(a) Who are thestakeholders (the affected parties) in this situation?(b) Identify theethical implications, conflicts, or dilemmas in the above described situation.(c) What might thecompany do to reduce the pressures on managers and decrease the ethicalconflicts?
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