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.


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