Was Dave behaving ethically by trying to force the Semiconductor Division into a price break?

Rambotix Company has two divisions, the Semiconductor Division and the X-ray Division. The X-ray Division may purchase semiconductors from the Semiconductor Division or from outside suppliers. The Semiconductor Division sells semiconductor products both internally and externally. The market price for semiconductors is $100 per 100 semiconductors. Dave Bryant is the controller of the X-ray Division, and Howard Hillman is the controller of the Semiconductor Division. The following conversation took place between Dave and Howard:

Dave: I hear you are having problems selling semiconductors out of your division. Maybe I can help.

Howard: Youve got that right. Were producing and selling at about 90% of our capacity to outsiders. Last year we were selling 100% of capacity. Would it be possible for your division to pick up some of our excess capacity? After all, we are part of the same company.

Dave: What kind of price could you give me?

Howard: Well, you know as well as I that we are under strict profit responsibility in our divisions, so I would expect to get market price, $100 for 100 semiconductors.

Dave: Im not so sure we can swing that. I was expecting a price break from a sister division.

Howard: Hey, I can only take this sister stuff so far. If I give you a price break, our profits will fall from last years levels. I dont think I could explain that. Im sorry, but I must remain firmmarket price. After all, its only fairthats what you would have to pay from an external supplier.

Dave: Fair or not, I think well pass. Sorry we couldnt have helped.