BUS 590 Week 1 Assignment 1 Ashford
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BUS 590 Week 1 Assignment 1 Ashford
EXERCISE 1-4 Ethics and the Manager
Richmond, Inc., operates a chain of 44 department stores. Two years ago, the board of directors of Richmond approved a large-scale remodeling of its stores to attract a more upscale clientele.
Before finalizing these plans, two stores were remodeled as a test. Linda Perlman, assistant controller, was asked to oversee the financial reporting for these test stores, and she and other management personnel were offered bonuses based on the sales growth and profitability of these stores. While completing the financial reports, Perlman discovered a sizable inventory of outdated goods that should have been discounted for sale or returned to the manufacturer. She discussed the situation with her management colleagues; the consensus was to ignore reporting this inventory as obsolete because reporting it would diminish the financial results and their bonuses.
Required:
1. According to the IMA's Statement of Ethical Professional Practice, would it be ethical for Perlman not to report the inventory as obsolete?
2. Would it be easy for Perlman to take the ethical action in this situation?
EXERCISE 1-10 Corporate Social Responsibility
In his book Capitalism and Freedom, economist Milton Friedman wrote on page 133: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it … engages in open and free competition, without deception or fraud.”
Required:
Explain why you agree or disagree with this quote.
EXERCISE 2-7 Differential, Opportunity, and Sunk Costs [LO2-7]
Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. The...