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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?


Definitions:

Diet

The combination of foods and beverages consumed by an individual, often considered in terms of nutritional quality and balance.

Body Mass Index (BMI)

An estimate of obesity determined by body weight and height.

Obese

A condition characterized by excessive body fat accumulation that presents a risk to health, typically defined by a Body Mass Index (BMI) of 30 or higher.

Overeating

The act of consuming food in quantities greater than the energy expenditure of the individual, often leading to weight gain and potential health issues.

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