Norton Company manufactures infant furniture and carriages. The accounting staff is currently preparing next year's budget. Michelle
Question:
Norton Company manufactures infant furniture and carriages. The accounting staff is currently preparing next year's budget. Michelle Jackson is new to the firm and is interested in learning how this process occurs. She has lunch with Maria, the sales manager, and Barry, the production manager, to discuss the planning process. Over the course of lunch Michelle discovers that Maria lowers sales projections 5 to 10 percent before submitting her figures, while Barry increases cost estimates by 10 percent before submitting his figures. When Michelle inquires as to why this is done, the response is simply that everyone around here does it.
a. What do Maria and Barry hope to accomplish by their methods?
b. How might this backfire and work against them?
c. Are the actions of Maria and Barry unethical?
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