Frito Lay experienced a 20% drop in its sales. Even though the demand for its product decreased, Frito Lay did not cut the wages of its nonunionized workers. This is an example of

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Frito Lay not cutting the wages of its nonunionized workers despite a 20% drop in sales is an example of an implicit or social contract not to cut wages. In such situations, companies often rely on social norms and expectations to maintain their relationships with employees. Cutting wages could harm the company's reputation with employees and could result in decreased motivation and productivity. Therefore, companies like Frito Lay often prioritize maintaining these relationships and adhering to the implicit or social contract, even in challenging times.

Frito Lay Experienced a 20% Drop in Its Sales