At the End of an Especially Good Year,a Company Decides

question 48

Multiple Choice

At the end of an especially good year,a company decides to give bonuses to its sales employees.Two salespeople are included: Tracy shows a better-than-average sales record,whereas Colin was only an average salesperson.Colin has a reputation for being a straight shooter who complies strictly with the company's ethical code.On the other hand,Tracy made some deals that,as co-workers confided to middle managers,were "on the edge" of dishonesty.When the company's ethics panel reviewed one such deal,it was found to have been compliant with the letter of the stated code.Nevertheless,the financial officer recommends that both employees be given the same bonus. Which of the following,if true,might strengthen the ethical case for giving a larger bonus for Tracy?

• A)Asked to explain his tactics,Tracy said that sales work is an intrinsically competitive field,and co-workers should expect him to act in self-interest.
• B)One of the company's key policies involves tying bonuses strictly to sales records,to ensure fairness to all personnel.
• C)The entire sales staff had recently undergone a thorough refresher course in ethical behaviour in sales.
• D)Middle managers felt that most of the complaints were based on jealousy over Tracy's increased success rate.
• E)Providing a larger bonus to Tracy would give co-workers added incentive to increase their own sales records.

---

Definitions:

Retained Earnings Statement

A financial statement that outlines the changes in retained earnings for a company over a specific period.

Owners' Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest of the shareholders.

Net Income

The total earnings of a company after subtracting all expenses and losses from total revenue.

Return on Equity

A financial ratio that measures the profitability of a business in relation to the equity held by the shareholders.