Pedro Santos is the controller of a corporation whose stock is not listed on a national stock exchange. The company has just received a patent on a product that is expected to yield substantial profits in a year or two. At the moment, however, the company is experiencing financial difficulties; and because of inadequate working capital, it is on the verge of defaulting on a note held by its bank. At the end of the most recent fiscal year, the company's president instructed Santos not to record several invoices as accounts payable. Santos objected since the invoices represented bona fide liabilities. However, the president insisted that the invoices not be recorded until after year-end, at which time it was expected that additional financing could be obtained. After several very strenuous objections - expressed to both the president and other members of senior management-Santos finally complied with the president's instructions. Required: 1. Did Santos act in an ethical manner? Explain fully. 2. If the new product fails to yield substantial profits and the company becomes insolvent, can Santos' actions be justified by the fact that he was following orders from a superior? Explain.

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
icon
Related questions
Question
Pedro Santos is the controller of a corporation whose stock is not listed on a
national stock exchange. The company has just received a patent on a product
that is expected to yield substantial profits in a year or two. At the moment,
however, the company is experiencing financial difficulties; and because of
inadequate working capital, it is on the verge of defaulting on a note held by
its bank.
At the end of the most recent fiscal year, the company's president instructed
Santos not to record several invoices as accounts payable. Santos objected
since the invoices represented bona fide liabilities. However, the president
insisted that the invoices not be recorded until after year-end, at which time it
was expected that additional financing could be obtained. After several very
strenuous objections - expressed to both the president and other members of
senior
management- Santos finally complied with the president's instructions.
Required:
1. Did Santos act in an ethical manner? Explain fully.
2. If the new product fails to yield substantial profits and the company
becomes insolvent, can Santos' actions be justified by the fact that he was
following orders from a superior? Explain.
Transcribed Image Text:Pedro Santos is the controller of a corporation whose stock is not listed on a national stock exchange. The company has just received a patent on a product that is expected to yield substantial profits in a year or two. At the moment, however, the company is experiencing financial difficulties; and because of inadequate working capital, it is on the verge of defaulting on a note held by its bank. At the end of the most recent fiscal year, the company's president instructed Santos not to record several invoices as accounts payable. Santos objected since the invoices represented bona fide liabilities. However, the president insisted that the invoices not be recorded until after year-end, at which time it was expected that additional financing could be obtained. After several very strenuous objections - expressed to both the president and other members of senior management- Santos finally complied with the president's instructions. Required: 1. Did Santos act in an ethical manner? Explain fully. 2. If the new product fails to yield substantial profits and the company becomes insolvent, can Santos' actions be justified by the fact that he was following orders from a superior? Explain.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Financial ratios
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, marketing and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles Of Marketing
Principles Of Marketing
Marketing
ISBN:
9780134492513
Author:
Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:
Pearson Higher Education,
Marketing
Marketing
Marketing
ISBN:
9781259924040
Author:
Roger A. Kerin, Steven W. Hartley
Publisher:
McGraw-Hill Education
Foundations of Business (MindTap Course List)
Foundations of Business (MindTap Course List)
Marketing
ISBN:
9781337386920
Author:
William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:
Cengage Learning
Marketing: An Introduction (13th Edition)
Marketing: An Introduction (13th Edition)
Marketing
ISBN:
9780134149530
Author:
Gary Armstrong, Philip Kotler
Publisher:
PEARSON
MKTG 12:STUDENT ED.-TEXT
MKTG 12:STUDENT ED.-TEXT
Marketing
ISBN:
9781337407595
Author:
Lamb
Publisher:
Cengage
Contemporary Marketing
Contemporary Marketing
Marketing
ISBN:
9780357033777
Author:
Louis E. Boone, David L. Kurtz
Publisher:
Cengage Learning