Ethics case | Accounting homework help

 

For the following case situation, address the following issues in short essay format.

  1. Identify the ethical dilemma–Identify and analyze primary and secondary issues related to this ethical dilemma and impact on various stakeholders.
  2. Analyze the ethical alternatives–Analyze alternative resolutions to this ethical dilemma, the impact on various stakeholders, and the reasons specific stakeholders prefer each alternative.
  3. Resolution of the ethical dilemma–Use an ethical framework to determine the most appropriate resolution of this ethical dilemma. You may use one of the ethical frameworks presented on the powerpoint presentation.

George Hawkins is the controller of Okie Auto, Inc., which manufactures automobile parts at several plants in Oklahoma, and is a subsidiary of a national firm. Okie has had disappointing financial performance in recent years, because of pressure for lower selling prices.   Corporate headquarters has threatened to close the Oklahoma plants because of decreasing profit margins. One of George’s responsibilities is to present the Oklahoma plant’s financial plans for the coming year to the corporate officers and board of directors. In preparing for the presentation, George was intrigued to note that the focal point of the budget presentation was a profit-volume graph projecting an increase in profits and a reduction in the break-even point. Curious as to how the improvement would be accomplished, George ultimately spoke with Amanda River, the plant manager. River indicated that a planned increase in productivity would reduce variable costs and increase the contribution margin ratio. When asked how the productivity increase would be accomplished, River hinted that increasing the speed of the assembly line would increase productivity. George was afraid that speeding up the assembly line could lead to labor problems because the speed of the line was set by union contract. River responded that she was afraid that if the speedup were opened to negotiation, the union would object and that could result in the plant being closed. River indicated that she believed the speedup was the “only way to save the plant, our jobs, and the jobs of all plant employees.” She did not believe employees would notice a 2 or 3 percent increase in speed. River concluded the meeting observing, “You need to emphasize the results we will accomplish next year, not the details of how we will accomplish those results. Top management does not want to be bored with details. If we accomplish what we propose in the budget, we will be in for a big bonus.”

 
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