Doug Depp Is the Manager at Chutes,Inc

question 34

Essay

Doug Depp is the manager at Chutes,Inc.that sells parachutes.Management's next year's bonus is based on the current year's net income.In an effort to increase his bonus,Doug decides to buy the pull-cord used in making the company's parachutes from a less reputable supplier.The supplier's prices are lower,but the pull-cords are less reliable in successfully opening the parachute.
a.Explain how net income will be higher if the cheaper pull-cord is used in the parachutes sold to Chutes,Inc.'s customers.
b.Discuss whether Doug is acting in the best interest of the company and its owners.
c.Discuss the ethical issue and what the consequences of Doug's actions may be.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.