Jorge Michaels is the Winnipeg-based controller of SXSW Foods, a rapidly growing manufacturer and marketer of Mexican food products. Michaels is currently considering the purchase of a new cost management package for use by each of its six manufacturing plants and its many marketing personnel. Four major competing products are being considered by Michaels.

Horizon 1-2-3 is an aggressive software developer. It views SXSW as a target of opportunity. Every six months Horizon has a three-day users' conference in a Caribbean location. Each conference has substantial time left aside for "rest and recreation." Horizon offers Michaels an all-expenses-paid visit to the upcoming conference in Cancun, Mexico. Michaels accepts the offer, believing that it will be very useful to talk to other users of Horizon software. He is especially looking forward to the visit as he has close relatives in the Cancun area.

Before leaving, Michaels receives a visit from the president of SXSW. She shows him an anonymous letter sent to her. It argues that Horizon is receiving unfair favourable treatment in the SXSW software decision-making process. The letter specifically mentions Michaels's upcoming "all-expenses-paid trip to Cancun during Winnipeg's deep winter." Michaels is deeply offended. He says he has made no decision and believes he is very capable of making a software choice on the merits of each product. SXSW currently does not have a formal written code of ethics.

Required

1. Do you think Michaels faces an ethical problem regarding his forthcoming visit to the Horizon users' group meeting? Explain.

2. Should SXSW allow executives to attend users' meetings while negotiating with other vendors about a purchase decision? Explain. If yes, what conditions on attending should apply?

3. Would you recommend that SXSW develop its own code of ethics to handle situations such as this one? What are the pros and cons of having such a written code?