Question

You have been hired as the assistant controller of a company which produces boxes and other packaging materials. You have been doing research into using activity-based costing to determine if you can provide a reduction in costs of 5% per year over the next 3 years.

You are looking at how to reduce the cost of order taking and feel you can computerize the process and change how to process small orders. In doing your analysis of the order department you have determined activity-based costing would satisfy the cost savings, but would require reducing the staff by 2 employees (all the employees have been with the company for many years).

What is your responsibility to reduce costs? Utilize the IMA’s ethical standards to support your answer.

What is your responsibility to the employees?

Answer 1

Honesty, Fairness, Objectivity, and Responsibility are the four ethical standards of IMA. Members should act in accordance with these principles and should also encourage others n their organizations to adhere to them.

In the above situation, I have been hired by the organisation and thus my first responsibility is towards my employer. Organisation has entrusted me to perform a job, which I should perform with Honesty, Fairness, Objectivity, and Responsibility. It is my responsibility to work for the benefit of the organisation and thus need to maintain the objectivity of taking a decision keeping aside my emotions. I should also ensure that, this is done with honesty and fairness. There should be no bias while identifying the employees who would be required to leave.

My responsibility towards employees is, to ensure a proper compensation to employees who would be required to leave. Each and every employee should be evaluated on the basis of his performance and no undue favor should be given to anybody. Further, a proper notice should be given to leaving employees and they should be told the reason why they are required to leave.