50.1K

Verified Solution

Link Copied!

Ethics Case Swan Sports manufactures golfing equipment. Traditionally, the company has been

busy all year but has noticed that over the past few years business has fallen off in October and

November. If new business does not come in this year, the company will have to lay off some long-

time employees for those 2 months. Rob Patell, a sales representative, received an order from Bet-

ter Equipment Co., a competitor. Better Equipment cannot meet a customers rush order on time

and is willing to subcontract the work to Swan Sports on the condition that the Better Equipment

Co. namenot Swan Sports nameappear on all products. The order is at a price substantially

below Swan Sports usual selling price. The only way this order can be produced is to use lower-

quality materials than Swan Sports normally uses in its own products.

Rob Patell has recommended to his supervisor that this order be accepted and that lower-quality

materials be used. Patells reasoning includes the following points:

a. It is clearly a one-time order.

b. Swan Sports name will not appear on it.

c. Workers will not have to be laid off during October and November.

A differential analysis shows that Swan Sports will lose $1,000 on the order.

Required

What should the sales supervisor consider before making a decision?

Answer & Explanation Solved by verified expert

See Answer