>Business & Finance homework help.
comment and reply on the following two sources, about 150 words for each.
1. The reason that they manipulate their percentages and level of inventory is to receive the recognition. A bonus and a shoutout in the newsletter looks good for the managers and shows the employees that they are doing well. How they could do this would be by manipulating the amount of indirect costs and by undercounting the inventory. By doing this their percentage will look better and they will look like they have sold more.
2. I do not think this is a good idea because the manager will probably get very defensive and feel as though they are being attacked. I think that McNall should go to those plants and do an inspection on what is going on and see if she sees anything out of the ordinary.
3. The ethical responsibility to both of them is to come clean about what is going on. They should send over all of the correct information and take full responsibility. They should also have to apologize to Amanda for anything that was going on so that she is not reprimanded.
4. McNall would be able to do this by going to the plants and doing the numbers herself. She could spend a quarter on each plant ensuring that the information being collected is correct.
1.) Managers might have a tendency to manipulate their monthly estimates of % completion and level of inventory, especially within the manufacturing industry sector, due to the negative impact high inventory levels have on cash flow and warehouse capacity. To contribute to high inventory levels, production would exceed sales figures. If inventory levels decreased due to increased sales, then cash flow & warehouse capacity would establish a favorable result for the manager to promote.
2.) In today’s corporate environment, whistleblowing is a protected right, and is treated with the utmost respect and care. Assuming this company has an HR department, if I were Amanda, I would make HR aware of the anonymous communication and actively investigate the claim. If the claim has merit, then Amanda has created an environment where she is protected, as long as the findings proven & investigative methods abide by the company bylaws. Amanda has a right to legitimize the benchmarking program, and hold those who look to cut corners for personal gain accountable.
3.) Amanda McNall is a representative of Scott Quarry, and as such, the same ethical responsibility each plant controller directs toward the business entity should also be encapsulated in the ethical responsibility exhibited to Ms. McNall. The plant controller should report accurate results in order to drive the business’ reputation and profitability forward, which ultimately preserves their sustainability from a monetary and tenure standpoint. If inaccurate estimates are provided, leading to production rates being overstated, the company could end up with excess inventory that they couldn’t move. The excess product would then negatively impact cash flow & warehouse capacity, and the company would then need to eat the loss or sell the product at a discount just to break-even. This would result in a decrease in profit, which could then translate into job cuts. It’s best to be ethical than not, and avoid short-term gains in place of long-term success.
4.) The discovery of manipulated data could reveal itself by reconciling real results at the end of the month to estimated projections. Taking multiple months into account, a transparent trend should appear in regards to which controller is meeting projected results vs. not. Estimates are generally based upon historical data. By auditing and reconciling actual results over the course of the fiscal year, Amanda will be able to see how out of bounds certain controllers’ projections truly lie.