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Nick Green, the sales manager of the Johnson Rubber, a subsidiary in El Pais, has been selling about a half-million dollars a year in industrial rubber products (rotary drilling hoses and oil suction and discharge hoses) to the government-owned oil monopoly. He faces stiff competition from the local subsidiary of another multinational rubber manufacturer, which is trying to increase its share of the business. The principal reason for his success is his personal friendship with Captain Corona, the buyer. Brown has never bought anything for Corona except an occasional lunch and reasonably priced Christmas gift card of $50.

One day in December, he received a call from Captain Corona, who said that just as he was leaving his house, his wife complained that she needed a new refrigerator. Corona was calling Brown because he knew that the marketing manager of a refrigerator manufacturer was Brown's close friend. Brown told Captain Corona that he would call his friend to see whether the friend could get Corona a discount.

After the call, Green began thinking about his conversation with Corona. The man was responsible for his receiving a half-million dollars in orders every year. This was three times the business of his competitor, even though the product quality and prices were similar. Every year, he gave Corona a Christmas present worth about $50. The refrigerator would cost at least $250. Never had the Captain asked for anything before. Johnson Rubber had no rules regarding restricting the value of gifts, but employees were expected to exercise good judgment. Green wonders if this could be the beginning of a series of requests for expensive gifts or if Captain Corona was only interested in getting the best price possible

1. What are some of the actions that Nick Green could take and the possible consequences for each?

2. Which action should Nick Green take? Provide rationale.