Case

WORLDCHEM PHILIPPINES, INC.I.PROBLEM DEFINITION

Subjective understanding on bona fide emergencies which resulted to thesubjective approval of some salary loans which were in violation of the companyrules and policies.

II.OBJECTIVE

To limit or control the approval of salary loans in accordance with the companyrules and policies by granting such salary loans which are only to be used incases of bona fide emergencies and that such cumulative outstanding loans toan employee should not exceed one month’s regular pay.

III.AREAS FOR CONSIDERATION

a.Mr. Zeld Sorenson, the President and General Manager of WorldchemPhilippines, Inc., delegated responsibilities to the Company Controller andCompany Personnel Manager in order that Mr. Sorenson can concentrate onthe manufacturing and marketing activities of the firm.

b.Mr. Gaston Fernandez, the Controller, would be responsible for all companypurchases up to one thousand pesos. He could also delegate purchasingauthority to each department placing a limit as to the amount. He would alsobe responsible to salary loans to all employees earning a base salary of morethan three hundred pesos.

c.Mr. Felipe Fajardo, the Personnel Manager, would take charge of loans toemployees with a base salary of three hundred pesos or less.

d.All employees of Worldchem Philippines, Inc. were already informed aboutthe conditions under which the company would approve salary loans.

e.After six months, the entry “Salary Loan Advances” had more than tripled inamount. Mr. Sorenson sought some answers from Mr. Fernandez. Mr.Fernandez said that the figure was correct and that there was no dramaticincrease in genuine emergencies. Mr. Fajardo suggested that all the salaryloans he approved were justifiable and that each case had to be judged on itsown merits.

f.Mr. Fajardo’s reasons as to the approval of such salary loans were not valid inMr. Sorenson’s point of view.

IV.ALTERNATIVE COURSES OF ACTION

a.Mr. Fajardo should review...