Introduction
Ethics occupies a significant role in the business sphere because it obliges people to analyze their activities and solve existing dilemmas. Channels, a manufacturer of flatware, has encountered an ethical issue. Fannie May, the company controller, has discovered that the supervisor and the manager reduced the requirements to make more products meet specifications. This step was taken to increase the company’s average yield, but it could also result in customers receiving more low-quality pieces. Since Ms. May has come across this issue, she needs to find an appropriate response. The Institute of Management Accountants (IMA) and scholarly literature indicate that Ms. May should address the problem, while Channels needs to change its current level of control to achieve better outcomes.
Discussion
The IMA Statement of Ethical Professional Practice provides individuals with a few recommendations for addressing moral dilemmas. In particular, the institution highlights the principles of honesty, objectivity, and responsibility (Institute of Management Accountants [IMA], n.d.). These values indicate that when Ms. May identifies a negative issue, she is expected to take appropriate action to resolve it. There is no doubt that ignoring the discovery would be the wrong approach.
Furthermore, the IMA comments on a few standards that can simultaneously be applied to the case under analysis. Thus, the Integrity aspect prompts individuals to refrain from activities that could discredit the profession. At the same time, the Credibility point encourages people to report deficiencies that violate laws or organizational policies (Institute of Management Accountants [IMA], n.d.). These standards and principles explicitly require Ms. May to encourage the organization to return to the initial measurement procedure to ensure that only high-quality products are delivered to customers.
In addition, Channels relies on a particular control lever, which contributes to the issue above. According to Barros and Ferreira (2022), the company relies on diagnostic control systems. This term refers to formal information systems used to monitor outcomes and address issues (Barros & Ferreira, 2022). That is why the manager and the supervisor could easily change the existing specification requirements to affect the yield.
This information denotes that Channels can benefit from a different level of control, and a belief system seems a suitable option. This term implies that the business should develop appropriate mission, vision, and core values and encourage employee commitment to them (Barros & Ferreira, 2022). If this step is achieved, all participants will know the values the organization promotes and understand that violating them is harmful and unacceptable. It is additionally reasonable to introduce interactive control systems and boundary systems, including internal codes of conduct, to the workplace.
Conclusion
In conclusion, the assignment has demonstrated that Channels faces a significant issue: the rush to increase yield can degrade product quality, with negative consequences. That is why Fannie May is encouraged to take immediate action upon learning of the issue. On the one hand, such a response is appropriate in accordance with the IMA Statement of Ethical Professional Practice. Its principles and standards require Ms. May to disclose and resolve the issue. On the other hand, the company implements diagnostic control systems, but this control lever is insufficient. That is why Channels should combine all four levers to achieve good outcomes.
References
Barros, R. S., & Ferreira, A. M. D. S. D. C. (2022). Management control systems and innovation: A levers of control analysis in an innovative company. Journal of Accounting & Organizational Change, 18(4), 571-591.
Institute of Management Accountants. (n.d.). IMA statement of ethical professional practice.