Education Food Services at Central Main University

Case Summary:

This case examines the ethics of creating slack in a budget. Pam Worth's operation is one unit of a university food service division of a large corporation (CFSC). Pam's operation is controlled as a profit center.It is important for Pam to achieve her budget. If she does, she will get a good performance review and a 20% bonus. If she does not, she may lose her job. Budget slack enables Pam to give her staff more autonomy. Budget slack sometimes enables Pam to buy things that allow her to provide better service tothe university.

Case Questions:

1. Are Pam's actions ethical or unethical? Explain.
2. Should for-profit corporations create budgets in the same way for universities as compared to their other profit centers? Justify your answer.