Cheap Pharma Case Summary

709 Words 3 Pages
Pocketing the Greens-Alex Erlito S. Fider
1 Immediate Issue (s) or Problem (s): The principal issue that in need immediate answer is whether the lawsuit filed by the shareholders of Cheap Pharma Inc. against Mr. De Guzman, member of Board of directors of the said company with the other two directors will result to a favorable decision to Cheap Pharma Inc.
2 Basic Issues(s) 0r Associated Issues(s) The Mr. De Guzman as Board of Directors and other two directors did not perform their task adequately. As directors of the Company, they did not support the needed help and did not act as problem solver. They prioritized their personal interest over their responsibility as directors. The worst is Mr. De Guzman represents the Company
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entered into an agreement to buy shares of stocks for ten million of Green Med, an insolvent pharmaceutical company .It is the proposed idea of Mr. De Guzman, one of the Board of Directors of Cheap Pharma, way to improve the company’s sales . He, together with other two directors represents the company and negotiates with the Green Med’s receiver Dr. Gonzales. But unfortunately, before Cheap Pharma was able to pay the agreed amount, the second largest factory was razed by fire. The fund set aside for the agreement was reallocated to fund the reconstruction of the plant. Mr. De Guzman, knowing the situation ,take advantage for his personal interest by convincing Dr. Gonzales to sell the share to them which the latter agreed. After a month, the said directors earn large amount of income .The Cheap Pharma Inc.sued Mr. De Guzman with other two …show more content…
The commitment to their job was not shown. The directors did not exert effort to help in solving the situation. One of the basic goals of any organization is to use economic resources efficiently and effectively to survive. Organization is guided by values in various activities of the business such as ethical practices on management techniques, styles, aspirations and leadership.
4 Alternative Solution(s) or Options: 4.1 File a lawsuit against Mr. De Guzman and the two other directors The Cheap Pharma Inc. should take a steps to punish the responsible for not able to meet the agreement with Green Med Pharma.One way of maintaining the organizational goals and values of the organization. 4.2 File a case against Green Med for breach of Contract Sometimes the law excuses a material breach of contract such as unavoidable circumstances like the fire that razed the second largest plant of the Cheap Pharma is material. The Green Med should be considerate with the unexpected situation of the Cheap Pharma. The Green Med should not agree to sale the shares of stocks to Mr. De Guzman and two other directors since he had executed previous agreement with the Cheap Pharma. It is unethical move on the part of the Green Med, knowing that the he is transacting with the

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