PS is a franchiser in the highly competitive food industry. The company, which has been in operation for one year, is headquartered in Denver, CO. Each PS franchise is locally operated and owned but required to adhere to franchise performance measurements set by headquarters.

Headquarters needs to develop a budget that will allow it to estimate units of sales for burgers beginning with 650,000 per quarter beginning in January. The unit price of each burger is $6.50. The food chain would like to estimate 675,000 units of potato fries for each quarter. The unit price per serving of potato fries is $3.79.

Since each franchise location is decentralized, each manager is measured on the basis of profit contribution in his/her profit center, market penetration, and return on investment.

Failure to meet the objectives established by corporate management for these measurements has not been acceptable and usually has resulted in the dismissal of an investment center owner.

An anonymous survey of managers in the organization has revealed that local owners feel pressure to compromise their personal ethical standards to achieve corporate objectives for profits in the face of steep competition.

For example, during an incident of poor weather conditions and not enough truck drivers, owners felt pressure to reduce quality control to a level that did not assure the rejection of all unsafe products. Also, local restaurant managers were encouraged to use questionable sales tactics (such as overcharging customers) to increase the amount of the sales, charge for catering events but not provide the services, and collect money for coupon books with no delivery date scheduled for the books.

PSs chief executive officer is disturbed by the survey findings. In his opinion, this behavior cannot be condoned by the company. He concludes the company should do something about this problem.

For this scenario, Act as a consultant who has been hired by PS headquarters to provide recommendations regarding the budget type, benchmarks, a cost system that will be used to support an increase in sales, and ethical considerations.

Instructions: 1: Describe the role of all three stakeholders in the case. Be sure to list each stakeholder and briefly describe their role in the scenario above. 2: Explain 4 factors from the scenario that contribute to the dilemma. 3: Recommend a budget type appropriate for the scenario and describe the benefits that will result from this budget type. 4: Recommend 2 benchmarks to increase sales so that the PS headquarters and franchise owners can monitor and adjust their strategy each month as needed. The benchmarks must be measurable in dollars or percent change. 5: Recommend a costing system type appropriate for the scenario and support the recommendation with an example. 6: Explain 3 outcomes for PS, franchise owners, and/or customers that you expect to result from the changes you recommended. 7: Propose changes to address three ethical concerns mentioned in the scenario. Be sure to explain how these changes will address the concerns. 8: Sources. Use 3 or more quality sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment.