Question

Ethical Issues Star Buck, a coffee shop manager, has two major product lines—drinks and pastries. If Star allocates common costs on any objective basis discussed in this chapter, the drinks are profitable, but the pastries are not. Star is concerned that her boss will pull the plug on pastries. Star’s brother, who is struggling to make a go of his new business, supplies pastries to the coffee shop. Star decides to allocate all common costs to the drinks because “Drinks can afford to absorb these costs until we get the pastries line on its feet.” After assigning all common costs to drinks, both the drinks and pastries product lines appear to be marginally profitable. Consequently, Star’s manager decides to continue the pastries line.

Answer 1

The ethical issue we could see here was a self interest issue. Star was more concerned about her brother and becuase she didnt want him run out of business, she decided to let down her ethics and do such a thing as providing misleading information to the manager and henxe made him take a decision that she wanted or was in favor of her and her brother.

Her act got more to do with integrity and Honesty. She should be asking hersefl whether what she did was right or wrong. The manager has his trust on his staff and hence believed in the information given to him, but she did a very wrong thing by giving him misleading information. She only cared about personal gain and didnt really think about the best for the company she is working in.

Honesty is a virtue. It has to come from within. If she had provided accurate information, the manager would have closed down the pastry side and that would have probably helped him to make a better profit than right now. But due to the misleading information he continues to deal with pastries as well and this could lead to problems in the future.

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