Question

Super Security Co. offers a range of security services for athletes and entertainers. Each type of service is considered within a separate department. Marc Pincus, the overall manager, is compensated partly on the basis of departmental performance by staying within the quarterly cost budget. He often revises operations to make sure departments stay within budget. Says Pincus, “I will not go over budget even it means slightly compromising the level and quality of service. These are minor compromises that don’t significantly affect my clients, at least in the short term.”

Required:

1.    Is there an ethical concern in this situation? If so, which parties are affected? Explain.

2.    Can Pincus take action to eliminate or reduce any ethical concerns? Explain.

3.    What is Super Security’s ethical responsibility in offering professional services?

4.    Are there things outside Pincus' control that would cause costs to be over budget? If so, should his compensation plan be reevaluated? Explain.

Answer 1

1. There is ethical concern in this situation as Marc is is reducing cost of services to remain within the budget and to pocket his full compensation. But in doing so he is compromising on the security of the client. He is not charging less to client to reduce the quality of service and the client even does not know about the compromise done on service quality. This is obviously an ethical issue with Super Security Co.

2. Marc is the person who is causing the ethical issue and he can take action by keeping the service quality intact. If needed , he can approach the customers with request to increase the contract price if costs are moving upward and not manageable at the current level. But reducing costs by reducing service level to remain within budget is not the correct approach. If he cannot manage the cost , he should be ready tp take a cut in his salary rather than compromisisng on the service quality.

3. Super Security's ethical responsibility in offering professional service is to provide the service to the clients as per the contracted quality and quantity. The quality parameter should also be of equally important like that of quantity and there must not be any compromise on that.

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