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Mini-Case: ETHICS – Doing “good” vs. Doing the “right” thing

Ed and Marci Buchanan are spouses and partners in a business called “Flags Unlimited.” They made and sold a variety of national flags in various shapes. About 40 percent of their total revenues came from a single chain retailer, MegaMart USA that owned 798 stores throughout the United States. When Ed and Daisy started their company, their son’s classmate’s father was a senior buyer at MegaMart USA. The buyer, Arturo Higuain, encouraged Ed and Daisy to submit a bid to MegaMart USA and he helped the couple establish the relationship that led to subsequent recurring sales at the retailer. Higuain’s wife, Lupe, was the head of the school’s PTA and in charge for fund raising. Without Arturo’s asking, the Buchanans started contributing significant sums of money to the PTA. Arturo never discouraged them from contributing. In a cost cutting move, Arturo was laid off from MegaMart USA and in his place, Cindy Carmichael became the buyer who interacted with the Buchanans. Cindy hinted to the Buchanans that there were other vendors willing to supply flags at a lower price than the Buchanans but that if they would contribute to the rebuilding of her (Cindy’s) community’s softball park, they would continue to sell their product at MegaMart USA.

Did the Buchanans act ethically in contributing to the school’s PTA?