As was emphasized in the Prologue chapter, ethics is a hot button topic in today's accounting and business environment. Below you will read a real$-$life scenario where a company structured its employee evaluation process to help spur sales, but may not have been in the best long$-$term interests of the company and its owners. This topic ties in to SLO C $--$ taking a topic and looking at in a practical, real$-$life scenario. This also relates to your overall business education, as ethics are a critical component of any business program.

Consumers and attorney generals in more than $40$ states accused a prominent nationwide chain of 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 $$Managing for Organizational Integrity,$$ Harvard Business Review, Volume $72$ Issue $3$: In the face of declining revenues, shrinking market share, and an increasingly competitive market $...$ management attempted to spur performance of its auto centers. $...$ The automotive service advisers were given product$-$specific sales quotas$$sell so many springs, shock absorbers$,$ alignments, or brake jobs per shift$$and paid a commission based on sales. $...[$F$]$ailure to meet quotas could lead to a transfer or a reduction in work hours. Some employees 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 attempting to sell customers unnecessary parts and services.

Directions

Be sure to read all directions prior to engaging with this activity.

For this discussion board, I would like you to discuss the following questions:

How would this behavior affect customers? How might customers attempt to protect themselves against this behavior?

How would this behavior probably affect profits and employment in the automotive service industry in the short run and the long run?

How might you structure the employee compensation and evaluation process to both incentivize employees and spur growth in sales without misleading customers?