Submitted by: Berlin Kevin de Torres Norman Masilang Princess Dyan Punzalan

I.

POINT OF VIEW This case is presented from the point of view of managers and accountants of the Hershey Foods Corporation.

II.

DEFINITION OF PROBLEM Working ethically and socially responsible while providing quality products and services at competitive prices that insure an adequate return on investment.

III.

STATEMENT OF OBJECTIVES The objective of the case study is to determine whether the company can continue in helping the community and the continuity of Hersheys Ethics and value system without hurting its market share and return on investment.

IV.

AREAS OF CONSIDERATION a. Gross Profit Analysis It shows that operation of Hershey Foods Corp. gives only 7.57% profit from the tremendous sales of $2.9 billion. Even they dominate the market; it is a low return on profit for the company. b. Community Focus Capital that should have been use to sustain or improve the operation was used for the community concern. It is absolutely seen that the company is more concern with the benevolence in the community practice rather than with profit making activity. c. Milton Hershey School It is finance by the dividends received from the profit of Hershey Foods Corporation. The share that the persons who finance the school are almost half of the company so it means that almost half of the profit used for the school and not merely used in the business operation. d. Strong Value System The guiding philosophy of the company makes their employees ethical and does the right thing. Employees believe that if they do right, the company will support them and this is a great motivating factor that helps the company in gaining trust from their employee and stands firmly competitive institution.

V.

ALTERNATIVE CAUSE OF ACTION Conduct research on how to improve the profit of the company or try to minimize the cost and expense in production. Try to minimize also the cost of company involvement in such a way that there will be still social responsibility actions and on the same time the capital can be used to improve the quality of the products. Continue dominating the market and be concern more on the profit analysis. Sustain the ethical practices inside the company and find some more alternatives to improve the ethical system of the firm. Conduct first a study before constituting a community action in order to know of its feasible to do such actions.

VI.

RECOMMENDATION We recommend that the Hershey Foods corp. should conduct feasibility studies to determine how can they manage and maximize the capital and profit without hurting its ethical values and social responsible projects. The studies can also help them in assessing when to start a community involvement if its a feasible time to do so. We also recommend that the company must form a new department that will focus on improving the ethical standards and social involvement without incurring much cost and providing a competitive quality products. The company should balance its profit priority and ethical and social responsibility.

VII.

PLAN OF ACTION The company should conduct study to determine how to stay in touch with the community while its minimizing its cost and maximizing profit, and on the same time being ethical. Building a new department that will focus on the analysis of profit and community project initiation can also help the company improve and attain its goal.

VIII. POTENTIAL PROBLEM ANALYSIS When all else failed, Hershey Foods Corporation should set new standards and limits its community involvement. They can also conduct survey in the existing market.

IX.

FALLBACK ANALYSIS Surveys, customers feedback, employee feedbacks and assessments, vertical and horizontal analysis of the firms financial statements, series of test, studies market ratings, can be used to conduct a new studies to improve the ethical system of the company without consuming much cost that should have been use in the production process.