Question

In: Accounting

Stark Security Company, a division of Stark Enterprises offers a range of top-notch security services for...

Stark Security Company, a division of Stark Enterprises offers a range of top-notch security services for athletes and entertainers. Each type of service is considered a separate department. Bruce Banner, who is the general manager at Stark Company, is compensated partly based on departmental performance by staying within the quarterly cost budgets. Banner proudly proclaims to you,“I will not go over budget even if it means compromising the level and quality of service. He explains that these are usually minor compromises that do not significantly affect Stark’s clients, at leastnot in the short run.”  However, he does not share what these “minor compromises” might be. As you walk back to your office, you reflect on the conversation with your colleague. As you do you begin to sense a possible ethical dilemma(s) associated with Bruce’s compromises. You decide to write a memo to Bruce.

Consider and address the following questions as you compose your memo.

1. What is the ethical concern(s) in this situation? What parties are affected? Explain.
2. Can Banner revise his strategy to eliminate or reduce any of the ethical concerns? Elaborate.  What suggestions do you have?
3. What is Stark Security’s ethical responsibility in offering professional services. Can this be linked to customer expectations? Upon hearing of Banner’s possible compromises what are your ethical responsibilities?

Solutions

Expert Solution

1. Ethical Concern in the case is: Bruce should provide top notch service and should never compromise the level of quality of service in order to reduce/control costs. The parties affected here are, Service recepients (received lower quality of service), Service Provider (as an organisation) and Bruce himself (his compensation is impacted if budgets exceed)

2. Banner should revise his strategy of compromising the quality of service to reduce costs. His organsation provides security services to high profile clients and ethics say that that the quality of service should never be compromised with, at any cost. The baseline of a Security service provider is providing security to clients and the quality of same can never be compromised with.

Suggestion: A detailed analysis can be carried to find other areas of controllable costs, which will help the organisation not to go overboard with overhead costs. Primarily, never compromise on the quality of services provided to clients.

3. Stark Security's ethical responsibility in offering professional services is to provide best quality of security services to its clients and to take best step forward to ensure that best level of security services are provided.

This can be linked directly to customer expectations and the customers would also expect best quality of security arrangements from the service provider.

Upon hearing Banners possible compromises, my ethical responsibilities is to make Banner understand the importance of maintaining/improving the quality of security when we are in the business of providing security services and more so where we have high profile clients like atheletes and sports persons. If Bruce does not agree to the same and compromises on the quality of service to reduce costs the same should be brough to the notice of his senior or supervisor, so that such breach of trust can be corrected.


Related Solutions

Super Security Company offers a range of security services to professional athletes and entertainers. Each type...
Super Security Company offers a range of security services to professional athletes and entertainers. Each type of service is considered within a separate department. Marc Pincus, the general manager, is compensated partly on the basis of departmental performance staying within the quarterly cost budgets. He often revises operations to make sure departments stay within budget . Marc always says, "I will not go over budget even if it means slightly compromising the level and quality of service. These are minor...
Discussion Question: Super Security Co. offers a range of security services for athletes and entertainers. Each...
Discussion 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 the budget. Says Pincus, “I will not go over budget even if it means slightly compromising the level and quality of service. These are...
Top Notch Homes Ltd. (TNH) is a privately owned company selling a luxury range of home...
Top Notch Homes Ltd. (TNH) is a privately owned company selling a luxury range of home equipment. Fiona Fielding, the daughter of the company’s founder, took over responsibility for running the company in December 2018. She has little management experience. Her main interest is in developing a new business line to broaden the company’s activities. She has no interest in day-to-day internal control activities preferring instead to adopt a more informal management style. Fiona found a supplier of a new...
Top Notch Homes Ltd. (TNH) is a privately owned company selling a luxury range of home...
Top Notch Homes Ltd. (TNH) is a privately owned company selling a luxury range of home equipment. Fiona Fielding, the daughter of the company’s founder, took over responsibility for running the company in December 2018. She has little management experience. Her main interest is in developing a new business line to broaden the company’s activities. She has no interest in day-to-day internal control activities preferring instead to adopt a more informal management style. Fiona found a supplier of a new...
Chapter 22 Lead Question Discussion Post Super Security Co. offers a range of security services for...
Chapter 22 Lead Question Discussion Post 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....
Alert Security Services Co. offers security services to business clients. The trial balance for Alert Security...
Alert Security Services Co. offers security services to business clients. The trial balance for Alert Security Services Co. has been prepared on the following end-of-period spreadsheet for the year ended October 31, 2016: Alert Security Services Co. End-of-Period Spreadsheet For the Year Ended October 31, 2016 1 Unadjusted Unadjusted Adjusted Adjusted 2 Trial Balance Trial Balance Adjustments Adjustments Trial Balance Trial Balance 3 Debit Credit Debit Credit Debit Credit 4 Cash 18.00 5 Accounts Receivable 90.00 6 Supplies 14.00 7...
Lewis and Stark is a public accounting firm that offers two primary services, auditing and tax-return...
Lewis and Stark is a public accounting firm that offers two primary services, auditing and tax-return preparation. A controversy has developed between the partners of the two service lines as to who is contributing the greater amount to the bottom line. The area of contention is the assignment of overhead. The tax partners argue for assigning overhead on the basis of 40% of direct labor dollars, while the audit partners argue for implementing activity-based costing. The partners agree to use...
Lewis and Stark is a public accounting firm that offers two primary services, auditing and tax-return...
Lewis and Stark is a public accounting firm that offers two primary services, auditing and tax-return preparation. A controversy has developed between the partners of the two service lines as to who is contributing the greater amount to the bottom line. The area of contention is the assignment of overhead. The tax partners argue for assigning overhead on the basis of 40% of direct labor dollars, while the audit partners argue for implementing activity-based costing. The partners agree to use...
Alert Security Services Co. offers security services to business clients. Based on the end-of-period spreadsheet, prepare...
Alert Security Services Co. offers security services to business clients. Based on the end-of-period spreadsheet, prepare the closing entries for Alert Security Services Co. Alert Security Services Co. End-of-Period Spreadsheet For the Year Ended October 31, 2018 1 Adjusted Adjusted 2 Trial Balance Trial Balance Income Statement Income Statement Balance Sheet Balance Sheet 3 Debit Credit Debit Credit Debit Credit 4 Cash 13.00 5 Accounts Receivable 108.00 6 Supplies 8.00 7 Prepaid Insurance 2.00 8 Land 184.00 9 Equipment 50.00...
Appendix: Adjustment Data on an End-of-Period Spreadsheet Alert Security Services Co. offers security services to business...
Appendix: Adjustment Data on an End-of-Period Spreadsheet Alert Security Services Co. offers security services to business clients. The trial balance for Alert Security Services Co. has been prepared on the following end-of-period spreadsheet for the year ended October 31, 2019. In addition, the data for year-end adjustments are as follows: Fees earned, but not yet billed, $34. Supplies on hand, $8. Insurance premiums expired, $42. Depreciation expense, $17. Wages accrued, but not paid, $17. Enter the adjustment data, and place...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT