The finance director has been carrying out some sensitivity analysis and produced figures that show that the return on capital employed could be improved if the company were to downsize, make existing staff redundant and replace them with lower-paid temporary staff. The current return on capital employed and PE ratio exceed the industry average but the change of policy would take the company into the top quartile with a favourable impact on the directors’ performance targets and bonuses. This is a common commercial practice. Discuss whether there is an ethical problem in

(a) the company pursuing such a policy;

(b) the finance director submitting such a proposal; and

(c) the finance director failing to submit such a proposal.