Acesite Corporation vs. Nlrc

Acesite Corporation vs. NLRC Facts: * Leo A. Gonzales (Gonzales) was a Chief of Security of Acesite Corporation. * Gonzales took several leaves (sick leave, emergency leave, and vacation leave), thereby using up all leaves that he was entitled for the year. * Before the expiration of his 12-day vacation leave, Gonzales filed an application for emergency leave for 10 days commencing on April 30 up to May 13, 1998. The application was not, however, approved. * He received a telegram informing him of the disapproval and asking him to report back for work on April 30, 1998.
However Gonzales did not report for work on the said date. * On May 5, 1998, Acesite sent him a final telegram in his provincial address containing in order for Gonzales to report back to work. * Gonzales, who claims to have received the May 5, 1998 telegram only in the afternoon of May 7, 1998, immediately repaired back to Manila on May 8, 1998 only to be “humiliatingly and ignominiously barred by the guard (a subordinate of [Gonzales]) from entering the premises. * It appears that on May 7, 1998, the issued notice of termination was thru an inter-office memo. * Gonzales thus filed on May 27, 1998 a complaint against Acesite for illegal dismissal with prayer for reinstatement and payment of full backwages, etc. * Acesite claims, Gonzales “showed no respect for the lawful orders for him to report back to work and repeatedly ignored all telegrams sent to him,” and it merely exercised its legal right to dismiss him under the House Code of Discipline. LA – the complaint for lack of merit, its holding that Gonzales was dismissed for just cause and was not denied of due process. * NLRC – reversed that of the Labor Arbiter. * CA – finding that Gonzales was illegally dismissed, affirmed with modification the NLRC decision. Issue: * WON Gonzales was legally dismissed for just cause. Held: * No. there appears to have been no just cause to dismiss Gonzales from employment.
As correctly ruled by the Court of Appeals, Gonzales cannot be considered to have willfully disobeyed his employer. Willful disobedience entails the concurrence of at least two (2) requisites: the employee’s assailed conduct has been willful or intentional, the willfulness being characterized by a “wrongful and perverse attitude;” and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. In Gonzales’ case, his assailed conduct has not been shown to have been characterized by a perverse attitude, hence, the first requisite is wanting. His receipt of the telegram disapproving his application for emergency leave starting April 30, 1998 has not been shown. And it cannot be said that he disobeyed the May 5, 1998 telegram since he received it only on May 7, 1998. On the contrary, that he immediately hied back to Manila upon receipt thereof negates a perverse attitude.


Teletech Corporation 1996

Teletech Corporation 1996 Teletech Corporations has headquartered in Dallas, Texas, defined itself as a “provider of integrated information movement and management. The firm had two main business segments: The Telecommunication Services and the manufacture of computing and telecommunications equipment named, Product and Systems. Margareth Weston, a Teletech chief financial officer, learned of Yosarrian’s letter in January 1996. Margareth organized a team immediately of lawyers and finance staff to assess the threat.
Maxwell Harper, the firm’s CEO, scheduled a teleconference meeting of the firm’s board of directors the next day. Harper and Weston agreed that before the meeting they need to fashion a response to Yossarian’s assertions about the firm’s returns. It is in connection with the article published that reclusive billionaire Victor Yossarian has acquired a 10 percent stake in Teletech Corporation and has demanded two seats on the firm’s board of directors. The purchase was revealed upon filing with the Securities and Exchange Commission and separately a letter to Teletech’s CEO, Maxwell Harper.
It is stated that the firm is misusing its resources and not earning an adequate return and the company should abandon its misguided entry into computers and sell the Product and System Segment. Also, the management must focus on creating value for shareholders and Teletech must issued a brief statement emphasizing the virtues of a link between computer technology and telecommunications. Ironically, returns had been the subject of debate within the firm’s circle of senior managers in recent month.

A number of issues had been raised about the hurdle rate used by the company in evaluating performance and in setting the annual capital budget. Since the company was expected to invest nearly $2 billion in capital in 1996, gaining closure and consensus on these issues had become an important priority for Margareth Weston. Now, Yossarian’s letter lent urgency to the discussion. In the short run Margaret needed to respond to Yossarian. In a long run, she needed to assess the competing viewpoints and recommended new policies as necessary.


American Barrick Resources Corporation

The gold market is risky as it is impossible to predict the direction of price fluctuations. The greater the range or dispersion of the price changes, the greater the risk involved (market or price risk). When building a risk-management strategy, the firm will start by looking at its operational management to see if it can find ways of reducing the risks it is taking. It will try to ensure that the inflows and outflows are balanced in nature, by currency, and interest-rate sensitivity and so forth, thus creating internal hedges matching by costs and revenues.
Operational hedging involves the firm changing sources of supply, the location of manufacturing, adjustment of production etc. in order to reduce the impact of economic factors. Unfortunately, there are many problems associated with operational hedging. Changing suppliers disturbs existing business relationships, may lead to production and/or quality control problems and is slow to implement.
ABX might consider operational business decisions which involve considerable long-term investment which, probably have significant `exit cost elements. ABX could face considerable costs in altering operational procedures as a risk management tool and would hence not use strategic risk management as their primary means of controlling their macroeconomic exposures. arrick-Cullaton Gold Trust, marketed in Canada and Europe. Figure 1 shows the payout diagram for the investor (right hand scale) and the costs to ABX (left hand scale). The gold trust paid investors 3% of the mine’s output when the price of gold was at or below $399 per ounce, rising to 10% of production when gold was at $1’000 per ounce. ABX totally raised $17 million trough this trust.

The trust represents indirect equity comparable to preferred stock. Trust holder have a right on interest payments (can be seen as dividends) but no voting rights. The payoff for ABX was that it limited the cost of this equity to 3% (of the firms output) when the gold price was at or below $399 and at the same time offering its investors a substantial upside potential of 10% of the mines output when the gold price would reach $1,000 per ounce. This limited potential cost of debts to 10% for ABX.
In addition, ABX had the possibility to buy the trust back if gold prices and production rose significantly in their favour. By doing so, they could protect themselves from paying large amounts of interests. The characteristic that the payout was tied to the mines output helped further to reduce cost of debt when the gold price was at an unfavourable level and thus stabilized the net income. This instrument does not hedge ABX gold price risk on the sales side but on the cost side.
Bullion Loans
ABX entered a bullion loan contract with Toronto Dominion Bank in which it received 77,000 ounces of gold that ABX sold immediately on the sport market for $25 million ($324.68/ounce). Over the next 4 years ABX had to repay in monthly gold ounce instalments incl. 2% annual interest. The assets of the mine (value $54.2 million) and a guarantee issued by ABX collaterized the loan. Additionally, ABX was required to make accelerated deliveries equal to 50% of the cash flow from the mine after deducting capital expenditures and mandatory deliveries.
Figure 2 shows the ABX firm value diagram for the bullion loans. ABX locked the price when it sold the gold on the spot market for $325 over the next 4 1/2 years. ABX would suffer from forgone profits if the gold price rose above $325 because they could sell it on the spot market for a higher price. On the other hand, if the price would fall, ABX is better off at a price of $325. Additionally, ABX was contractually committed to make accelerated deliveries equal to 50% of the mines cash flow. That means, with high cash flows ABX was in a position to quicker pay back its debt in ounces of gold. This resulted in lower forgone profits (slope decreased as depicted.
The characteristic of the repayment and especially accelerated repayment is shown in figure 3. The dotted lines indicate accelerated repayment of gold that can vary depending on the level of cash flows that the mine produced. Characteristics of the repayment of gold with possible scenarios of accelerated repayments (dotted line) ABX raised $ 50 million in 2% gold-indexed notes. Investor paid $1’308 per note and received $26.16 annual interest payments (2%) and the right to redeem the note between February 88 and February 92 with an linearly increasing amount of gold as depicted in figure 5. At expiration the note had to be redeemed. At a prior redemption date, earliest February 88, the investor could chose whether to receive cash or gold bullion whose value equalled 3.2150 ounces at the first redemption date and 3.3804 ounces of gold at expiry. There was no collateration.
Figure 4 shows the payoff for ABX for the first redemption date. The payoff for ABX was limited at the cost of the index-note of 2% plus the premium of the call option at the redemption date. The major payoff for ABX was the low debt financing costs of only 2%. On the other hand, the note holder was attracted by the fact they could participate in the raising gold price. ABX had to deliver a specified quantity of gold at specific date for a price fixed at the beginning of the contract. The parties were free to close out their positions through a negotiated settlement. Forward sellers receive a premium above the current gold price called contango. The contango rate was set according to the difference between the interest rate of $ (7%) and the lease rate of gold (2%). This resulted in a contango premium of 7% – 2% = 5%.
ABX logged the gold prices for the future production and therefore insured the risk of price fluctuation between now and the specified delivery date of the contract. This allowed ABX to exactly predict their revenues, and with its stable production costs, its cash flows.  Options and Warrants (collar strategy) ABX sells and buys simultaneously a call (sell) and a put (buy) option on gold. The exercise price of the put is below that of the call. No cash outflow occurs as the premium received form the sale of the call is used to purchase the put.
The collar with an put and a call option with different exercise prices x1 and x2 By setting the exercise price of put and call ABX can determine the degree of gold price risk they want to take. ABX can adjust the exercise of new puts / calls according to new market prices. By following this strategy ABX is able to stabilize its revenues without the cost for financial instruments.


Multinational corporations

As for the social dimension, it would then relate to another one of the 3P’s that Elkington mentioned which is known as ‘people’. The social dimension is considered somewhat intrinsic with the environmental dimension. It is believed that in some way, one dimension can affect the other if there were changes in any one domain. What it mainly focuses on is the impact of organizations, firms or corporations have on the social system within in which it operates.
Due to this, “the expectations of diverse groups of internal and external stakeholders as well as interest groups comprising civil society are genuinely considered and skillfully balanced” (Jamali, 2006). In other words, this social dimension serves to maximize the positive and beneficial impacts of a firm’s operations on broader society not just limited among them. All in all, the social bottom line can be said to incorporate most issues or rather, any issues pertaining to public health, social issues or community issues, public controversies, social justice, human rights, working conditions, labor rights, equal opportunity and basically, anything in relation to human social elements.
From a social perspective, Torjman (2000) believed “that human well-being cannot be sustained without a healthy environment and is equally unlikely in the absence of a vibrant economy”. It is this ‘people’ factor that help strengthen social structure of organizations and come together to work towards a collective or common goal. The main priority however, of this section is that it was made to promote a healthier work environment, for both employee and employer, eradicate exploitation of labors, whether foreign or local labor, and also to keeping tabs of projects by monitoring and through effective collaboration.

Now that all three areas of the triple bottom line have been covered, it is safe to say that sustainability and the triple bottom line is indeed a necessity in today’s demanding world. After all that has been said thus far, it is a clear enough indication on how important sustainability is and how the integration of the triple bottom line is vital into today’s businesses or corporations. Therefore it is fair to say that sustainable development is considered a holistic approach which has the capacity to improve the quality of life (Kolk, 1999).
The advantages of incorporating this framework even go as far as to create a new job market. However, despite the advantages and benefits that TBL bring economically, environmentally or even socially, there are certain setbacks or limitations that come with. This is because although many appreciate the advancement that CSR has attained, there are still parties or quarters that are unhappy with certain corporations. It is alleged that these particular corporations are only acting in self interest.
There are even claims relating to multinational corporations that are pretending to be ethical in areas that are monitored or more regulated, for example North America. This however is not the same because consequently as this ethical practice is done, unethical practices are being done elsewhere in other parts of the world, some worrying even to the point of being involved with cheap child labour. Although some corporations are never charged for their indecencies or escape punishment, it is near impossible to escape the reality of the general public knowing of any indecent ordeal a particular corporation practices after being exposed (Robinson, 2000).
The problem is because many stubborn companies that claim to be socially responsible more often than none tend to not live up to such standards. Hence, more accountability needs to be practiced among corporations and more pressure by the public needs to be put to rest this problem (Elkington, 1999). In any case, with successive implementation of the triple bottom line, companies are expected to perform well in both financial and non-financial areas such as business ethics, environmental policies and human rights, to name a few. However, everything aside, ultimately, the important note to be made here is that many business leaders today have discovered what it means to measure performance against the triple bottom line (Kleine & von Hauff, 2009).
Evidently, the mix of economic growth concerns, environmental protection concerns and social equity concerns were once deemed an impossible and impractical ethic. Yet based on today’s outcome, the very mix once deemed impractical has now begun to define long term strategy and everyday practice for leading manufacturing corporations globally. Hopefully the essay’s question on why ‘The triple bottom line should be viewed as a new goal by businesses’.
In conclusion, sustainability and the triple bottom line is an ongoing process that still has the unfolding potential to contribute when it comes to corporate social responsibility. Van de Bergh too argued that “a balanced adaptive process of change in a multi-dimensional complex integrated system” (Van de Bergh, 1996). A new measure of corporate performance has been made possible and this is achieved through balancing traditional economic goals together with social and environmental concerns (McDonough & Braungart, 2002).
As the concept is still being digested by some parts of the corporate culture, many are already enjoying the perks and benefits of the implementation of the triple bottom line. With the triple bottom line framework, it encourages the growth in manufacturing products that not only enhance and maintain the well being of nature and culture but also generating extra economic value. Suffice to say, once the core principles in regards to ecologically intelligent design have been widely applied, the growth potential for both nature and commerce will be off the charts.
Though, time and time again, it must be stressed that the co-operation from corporations must be given in full extent for these methods to be successfully implemented. Keeping the environment clean and healthy is everyone’s responsibility. The future generation deserves a chance of being a part of this clean and healthy environment. Finally, the phrase ‘No Profit without Planet and People’ is the perfect rule to abide by in the context of triple bottom line and to conclude this essay.
1. Elkington, J. (1998), “Partnerships from cannibals with forks: The triple bottom line of 21st-century business”, Environment Quality Management, Vol. 1, 37-51.
2. Elkington, J. (1999), “The link between accountability and sustainability – theory put into practice”, paper presented at Conference on the Practice of Social Reporting for Business, ISEA, 19 January, Commonwealth Conference Center, London.
3. Elkington, J. (2004), “The triple bottom line: Does it all add up”, available at: (accessed April 24, 2011).
4. Gray, R., Kouhy, R. and Lavers, S. (1995), “Corporate social and environmental reporting”, Accounting, Auditing ; Accountability Journal, Vol. 8 No. 2, pp. 47-77.
5. ICC (2002), Business in Society: Making a Positive and Responsible Contribution, International Chamber of Commerce, London.
6. Jamali, D. (2006), “Insights into triple bottom line integration from a learning organization perspective”, Business Process Management Journal, Vol. 12 No. 6, pp. 809-21.
7. Kleine, A. and von Hauff, M. (2009), “Sustainability-driven implementation of corporate social responsibility: application of the integrative sustainability triangle”, Journal of Business Ethics, Vol. 85, pp. 517-34.


The Tortuous Evolution of the Multinational Corporation

Ask four different people and you will get four different answers as to what a multinational company is. Some companies will think that they are multinational because their products are marketed in many different countries, have manufacturing located around the world, or even because they have executives who are non-American. But what is the big deal with a company being multinational? This is because many companies regard being multinational with prestige and respect.
Executives of firms have different criteria in which they rate if their firm is multinational or not. They have different reasons for wanting their firm to be multinational. The first is that they see a company that is multinational as having a great long-term lookout. Another reason is that this is seen as a different type of company. It is seen as a different type of company for a few reasons. The major reason is that this type of company is seen as one that will bring together the world.
What makes it so difficult to define whether a company is multinational or not? There are three primary characteristics that set companies apart from each other in regards to how they are A company will never express one of these characteristics fully, but will end up having all of these characteristics, but there will be one that will dominate. What is the ethnocentric characteristic that a company can posses? This trait is shown when a company’s base has the attitude of “we are better than the rest of the company that is in different countries than ours.” This is very much an implied attitude that is felt throughout the locations that are outside of the home country.

In an ethnocentric organization, there are a few characteristics that will stand out. You can look at the way that the headquarters does business. For example, when looking at how communications flow, there will be much communication to the subsidiaries. This communication will take the form of orders, or commands. Another attitude that will stand out is that they will not change what is expected from one country to another. They feel that they should treat all employees the same, and the employees should all give the same amount of work to the company. Where would an ethnocentric company look to fill a vacancy among its ranks? These types of companies recruit from within. This recruiting from within will also take place in its home country.
When you think about ethnocentric, it basically means that a firm bases things on its home country. This is from the way it does business to what it expects out of its employees. The executives will be from the home country as well. The next characteristic that a firm can have is polycentric. A polycentric company is one that the headquarters is more hands off in the way the company is run. In this type of multinational the headquarters believes that the local offices know how to best run their part of the business. The main control that the executives want is over the financials.
This type of multinational is more prevalent in European companies. These companies believe that the locals are the ones who know what the consumer wants and how the local government works. The executives in this type of multinational are not too concerned about having their hands is the operations of the business, as long as the locations are making them a profit.
Polycentric companies pride themselves on the fact that each subsidiary is its own entity. This allows each to develop their own culture and characteristics. The one problem with the home company being discontented is that it leaves the executives at the other locations feeling left out of the communication loop.  ne of the problems with a polycentric company is with the way that executive positions are filled. The problem comes into play that the company will mostly likely not promote the executives from the other countries. This is because they don’t think that executives from other countries should manage in foreign countries. This is a very limiting career choice for managers in host countries.
The final characteristic is geocentrism. A geocentric company is one that is looking to build good relations with the host country by leading in exports, and benefiting the country in many ways. The goal of geocentrism is to have the whole company work as one, not as independent satellites. When a company employs geocentrism, the managers are looking out for the good of the entire organizations. When the company is making decisions, they will make a decision that will benefit the entire organization, not just their own country. This type of system also requires changing the incentive system. This would require changes to have the managers thinking more globally.
A geocentric company has open lines of communication. This is shown that the communication is not just given from the headquarters. The flow of communication flows up and down in the organization. Management does not hold the belief that they know what is best and can learn from all the areas of the company. In this type of company when an executive position opens up, the company believes that the best person, no matter where they are from, will get the position.
As stated earlier, no company is 100% any of these three characteristics. Most companies are striving to be more geocentrism. While on the road to becoming more geocentric, companies must benchmark where they have been to be able to plan their future strategies. Companies are finding the need to transition away from ethnocentrism. This is because they are finding that it will cost them more to stay in business. The costs that will affect the company are ineffective planning and not getting the backing of the employees. Once a company starts to transition out of ethnocentrism, they will start to notice difference that will make the company run smoother. The biggest difference will be in communication.
Polycentrism and geocentrism hit the companies in their bottom line. This is because of the money that it cost for some of the efforts that they have to do to stay in business. When looking at polycentrism this happens by duplication of efforts. This is because of each subsidiary running as if it were its own stand-alone company. The biggest cost for geocentrism is the travel expense that is incurred. This happens because of executives being located globally.
With the trend to be a geocentric business, many companies are resorting to appointing executives for looks. This is an attractive option for businesses because it allows them to give the appearance of being well rounded. When a business is trying to make the transition over to geocentrism, it should be done in small steps. It is easier for a company to start to overhaul one department at a time and learn from their mistakes. This way when it is time to impact the larger departments many of the obstacles have already been over came and the employees are looking froward to the change.