The Controller of One Division of a Large Diversified Firm

question 52

Essay

The controller of one division of a large diversified firm is compensated by salary plus bonus. The bonus is a significant part of total compensation, and is based directly on the profits of the division. Thus, the controller has an incentive to find ways to increase profits, including the delay of discretionary expenses such as research and development, delay of maintenance and repair of manufacturing equipment, and delay of sales promotions.
Required:
Is finding ways to increase profits as described above unethical? Why or why not? Who is to blame, if anyone?

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Definitions:

Phantom Limb Sensations

refer to the perception of sensations, often pain, in a limb that has been amputated, indicating brain and nerve involvement.

Sensory Input

Information received by the senses such as sight, sound, touch, taste, and smell, that is then interpreted by the brain.

Peak Moment

The highest or most intense point in the development or resolution of something.

Physical Pain

An uncomfortable sensory and emotional experience associated with actual or potential tissue damage.