The top management at GE is well known for "managing by the numbers." The CEO sets target profits for each division at the beginning of the year. The CEO has stated that she will not interfere with the divisions and the VPs of each division are free to do anything they want as long as they hit their target profit for the year. In November, the VP of the Cellular Phone division noticed that his division may not hit the target profit for the year. As a result, he directed his staff to not record expenses that were incurred in December but to delay the recording until January of the next year. These actions will also reflect on the Financial Statements that will be provided to the investors and creditors of the company. Questions (please answer these questions and also comment on other students' answers):

1) Are the actions of the VP ethical? Please explain why or why not.

2) Does the general management philosophy and policies of GE encourage or discourage ethical behavior? Please explain your answer