Budgetary Performance and Ethical Behavior

BudgetaryPerformance and Ethical Behavior

Budgetaryperformance and ethical behavior

Linda’sethical behavior

Linda’sactions to ensure her division receives a bonus are ethically wrong.Linda’s behavior is highly unethical since she is ready to doanything even unethical, to get the bonus meaning to her, the endjustifies the means. When companies put in place incentives toenhance performance, many are the times the incentives destroy theperformance that they are intended to improve (Brown &amp Mitchell,2010). Linda has crossed ethical boundaries and to worsen thesituation has influenced other line managers under her leadership toadopt unethical conduct to ensure their division receives the reward.Linda’s goal is not focused on improving her division’sperformance but on getting the financial incentive through any means.She values reward more than her ethical conduct and hence has chosenthe shortest and the easiest root at attaining the performance thatqualifies for the reward making her less concerned about her ethicalconduct.

Thecompany is playing a big role in facilitating Linda’s unethicalactions. According to Brown &amp Mitchell, (2010) what is happeningin many companies, which have adopted the reward system to enhanceperformance is creation of a workplace in which employees value therewards more than their employment. It is clear that the company isrelying too heavily on financial rewards to enhance performance andhas overlooked the importance of intrinsic motivation. Financialrewards do not motivate employees but instead encourages unethicalconduct, which in the end leads to poor performance. The company hasembraced reward system and forgot to design their jobs that providefreedom of choice and the chance to develop skills, which is aneffective strategy to enhance performance (DeCremer, 2009).

Whatto do as a marketing manager for the division

DespiteLinda being my direct boss, I would have declined the order since itis very unethical to defer the closing of sales until the next fiscalyear. By post-phoning the closing of sales, so many alterations haveto be made in order to balance the sales for the current and thefollowing year. Not all these alterations to sales statistics areonly unethical but amounts to a high degree of deceit and reticence.According to Mayhewand Pamela (2014), it is highly important that professionals learn toreport unethical behaviors to the management since it affects theorganizations as a whole. I would gather courage and face themanagement and report Linda’s unethical conduct. However, reportingsuch a senior personnel in an organization needs evidence and someoneelse to support the accusation.

Therefore,before reporting to the management, I would record the conversationor print the email from Linda containing the instructions to deferthe sales to next year. I would then search for another persondirectly affected by Linda’s unethical conduct as my supporter andreport the misconduct to our management. As a professional wellequipped with the knowledge on the importance of upholding ethics atworkplace, I would rather risk a destroyed relationship with mydivision manager and fail to receive and rewards rather than obeyunethical orders, which will not only affect organization’sperformance but will also ruin me personally as a professional in thelong run.

Courseof action as the plant manager

Withthe knowledge that all the other plant managers support the paddingof budget to receive rewards and hence no one will back up my claimsthat the budget has been padded, I would secretly gather enoughevidence and report the misconduct to the management. I wouldcarefully draw the correct budget using the correct figures. Next, Iwould make a clear comparison of the real budget and the fraudulentbudget to illustrate the alterations. With the statistics, I wouldface the management and explain to them how the division manager haspadded my budget in order to achieve profits, which would see us as adivision gets rewards. I would also inform the management that eachplant manager’s budget has been altered but they cannot disclosesince they value rewards more than ethics. Finally, I would suggestsome other strategies to improve performance such as employeeengagement in decision making rather than focusing only on rewards.According to DeCremer (2009), employees feel more motivated and focused on producinggood results when they feel valued by their management especiallywhen their opinions are considered in decision-making.

Whatto do as the division controller

Toavoid Linda, my division manager knowing that I intend to report herunethical conduct, I would pretend to obey her instructions.According to Mayhew &amp Pamela (2014), the best way to addressunethical behavior especially of a senior person is by reporting tothe senior management or relevant authority. I would then print theemail containing the instructions as an evidence to back up myaccusations and report Linda to the management. Through reportingunethical behavior to authorities, I will encourage other employee toreport their managers and other personnel whom they think arestepping outside their ethical boundaries. Such a culture ofreporting unethical conduct will affect organizational behavior aspeople will fear being reporting and hence focus on real performance.


Brown,M. E., &amp Mitchell, M. S. (2010). Ethical and unethicalleadership: Exploring new avenues for future research.&nbspBusinessEthics Quarterly,&nbsp20(04),583-616.

DeCremer, D. (2009).&nbspPsychologicalPerspectives on Ethical Behavior and Decision Making.Charlotte, NC: Information Age Publishing.

Mayhew,B., W. &ampPamela R. M. (2014). The Impact of Authority onRepo rting Behavior, Rationalization and Affect.&nbspContemporaryAccounting Research&nbsp31(2): 420-443.