Throughout this course, many discussion opportunities are provided to which you need to respond to other people’s opinions and comments. Please address the Discussion topic after you have completed your reading.
This Discussion provides you with an important opportunity to explore many aspects of how management decisions with ethical and financial implications may have far-reaching effect well beyond the boundaries of the organization. Some decisions made based entirely on quantitative factors, without regard to qualitative information, may lead to extreme consequences.
Within the accounting profession, the decisions made by the Arthur Andersen accounting firm to pursue a short-term profitable relationship with Enron led to the collapse of that accounting firm and ultimately to the Sarbanes-Oxley Act of 2002. Another notorious decision made without regard to the qualitative consequences involved the Firestone Tire Company and Ford Motors.
In October of 2015, Volkswagen admitted using technology to defeat carbon emission standards. Quantitative pressures can motivate management to market products that are known to be defective.
If a cost comparison is the only metric used between profits earned in the short-term to estimates of liability exposure, the consequences to all stakeholders can be significant in personal and financial terms.
Discussion Topic: Making Ethical Production Decisions
As has been evident in so many cases in recent years (i.e., Enron; Lehman Brothers, etc.), there are serious ramifications when an organization disregards acting in an ethical manner. It is not enough to have a corporate code of ethics if employees do not act in line with those espoused ethics and values. Sometimes the results can even have fatal consequences.
Please review the articles listed below which can be accessed in the Online Library located in the Course Resources area.
Then, prepare your Discussion topic responses in accordance with the instructions found below.
Articles: You can enter the title into the Online Library search bar after you have logged in.
- Belt, D. (2011, January). Challenger: The beginning of the end. U.S. Naval Institute Proceedings, 137(1), 64.
- Porter, B. (2011, August). Serving two masters. Mechanical Engineering, 133(8).
- Zeller, S. (2001). Blowout. (cover story). National Journal, 33(17), 1216.
After you have read the articles above, please post a substantive response to the questions after reading the scenario.
Kim Cidvak is a consultant for one of the largest public accounting firms. He has been called in to review compliance documentation regarding human rights violations at Nogle Manufacturing Conglomerate’s contracted overseas manufacturing operations in China. The contracted manufacturing operation has workers using equipment that must be handled carefully by trained personnel and in the U.S. requires the expensive safety equipment to be worn at all times. Reading the existing report from the Human Resources executive sent there to prepare it, Kim notices there is no report concerning safety compliance just simply training hours, and hours worked on shift.
- What are the risks and who are the affected stakeholders? What actions would you take as Kim in this situation and why?
- What ethical responsibilities do Kim and the accounting firms have versus Nogle Manufacturing Conglomerate and the contracted manufacturer? What are the considerations in terms of the financial implications versus the ethical ones and for whom do these apply?
Be sure to explain your reasoning using good Critical Thinking skill.
Post to the Discussion per your Syllabus guidelines.