7,8,9,10

EXERCISE 1-7 Ethics in Business auto repair shops of misleading customers and selling them unnecessary parts and services, from brake jobs to front-end alignments. Lynn Sharpe Paine reported the situation as follows in "Man- aging for Organizational Integrity." Harvard Business Review, Volume 72 Issue 3 40 states In the face of declining revenues, shrinking market share, and an increasingly competitive tive service absorbers, alignments, or brake jobs per shift-and paid a commission based on sales. [Flailure to meet quotas could lead to a transfer or a reduction in work hours. Some employ tattempted to spur performance of its auto centers.... The astomoAI y springs ees spoke of the "pressure, pressure, pressure" to bring in sales. This pressure-cooker atmosphere created conditions under which employees felt that the only way to satisfy top management was by selling products and services to customers that they didn't really need. Suppose all automotive repair businesses routinely followed the practice of atempting to sell customers unnecessary parts and services. How would this behavior affect customers? How might customers attempt to protect them- selves against this behavior? How would this behavior probably affect profits and employment i 1. 2. the automotive service In the 1970s, one to their peers. Some of the key findings of the survey were as follows: a, 70% of the students rated themselves as above average in leadership ability, while only 2% rated themselves as below average in this regard. With respect to athletic skills, 60% of the students rated their skills as above the median and only 6% of students rated themselves as below the median. 60% of the students rated themselves in the top 10% in terms of their ability to get along with others, while 25% of the students felt that they were in the top 1% in terms of this interper- sonal skill. C. What type of cognitive bias reveals itself in the data mentioned above? How might this cognitive bias adversely influence a manager's planning, controlling, and decision-making activities? What steps could managers take to reduce the possibility that this cognitive bias would adverely infla- ence their actions? Source: Dan Lovallo and Daniel Kahneman. "Delusices of Saccess: How Optimis. Undemines Executives' Decisions," Harvand Business Review, July 2303, pp 56-63 EXERCISE 1-9 Ethics and Decision Making Assume that you are the chainnan of the Department of Accoustncy at Mountein Sare University One of the accounting professors in your department, De. Caadler, has heen coesistentily and uni formly regarded by students as an awful teacher for more thaa 10 years Other scccunting profes- was granteci tenure 12 ycars ngo, thereby ensuring him life-long job security at Mountain State University