Fred vs. Sarah: Ethics in Overhead Cost Accounting
This paper examines an ethical dilemma in a business accounting context, pitting Fred's proposal to conceal true overhead calculation practices from customers against Sarah's transparent and financially sound alternative. The paper evaluates the risks of Fred's deceptive approach — including legal liability, reputational damage, and personal career consequences — and argues that Sarah's ethical solution is both morally and practically superior. It then outlines a step-by-step course of action for Sarah, from requesting time to consider the proposal through escalating to general management, and concludes that maintaining ethical integrity is in Sarah's best long-term professional interest.
- Fred's Proposal and Why It Is Unethical: Fred's deceptive overhead concealment is ethically unjustifiable
- The Business Risks of Deceptive Practices: Legal, reputational, and personal risks of Fred's plan
- Sarah's Ethical and Financial Alternative: Sarah's transparent proposal answers all of Fred's objections
- A Recommended Course of Action for Sarah: Step-by-step guidance for Sarah to challenge Fred's proposal
- Conclusion: Ethics as the Better Business Path: Ethical integrity protects Sarah's long-term career prospects
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What makes this paper effective
- The paper takes a clear, consistent ethical stance from the outset and supports it with both moral reasoning and practical business risk analysis, making the argument persuasive on multiple levels.
- It moves logically from problem identification to risk assessment to a concrete, step-by-step action plan, giving the analysis a practical, applied quality.
- The paper acknowledges the power imbalance between Fred and Sarah (employer/employee) and addresses it directly, adding nuance to what could otherwise be a one-dimensional argument.
Key academic technique demonstrated
The paper demonstrates applied ethical reasoning by mapping an abstract ethical principle — transparency in business practice — onto a specific workplace scenario. It evaluates both proposals against consequences (legal, financial, reputational) rather than relying on abstract moral claims alone, which is characteristic of consequentialist business ethics analysis.
Structure breakdown
The paper opens by identifying Fred's proposal as unethical and contrasting it with Sarah's alternative. It then develops the risk argument across legal, reputational, and personal dimensions. The final half shifts from analysis to prescription, walking through each decision point Sarah faces and the available options at each stage, ending with a clear recommendation grounded in long-term professional self-interest.
Fred's Proposal and Why It Is Unethical
What Fred is suggesting is not ethical. He is proposing a deceitful practice in the interest of gaining overhead, and he is planning to conceal from his customers the true practices of overhead calculation. This concealment is unethical because customers are being deceived in terms of costing procedures. The only reason it would go unquestioned is that it is being hidden in a private set of books.
Furthermore, Fred does have a choice. His solution is blatantly unethical in contrast to Sarah's solution, which is both ethical and financially sound. She had answers for every one of Fred's objections, and Fred should have paid closer attention to her proposal for this reason. In business, it is better and less risky to follow the ethical path rather than the deceitful one. Fred could choose to strike a compromise between profit and ethics by following Sarah's suggestion instead.
The Business Risks of Deceptive Practices
Fred's proposal also entails considerable risk. If the business is found to have conducted unethical and deceitful procedures, not only Fred and Sarah but the entire company would be at risk. Legal action could be brought against the company, and a substantial loss of business is possible, especially from the customers most directly affected by the deceit.
The company's reputation would also be compromised, resulting in a general loss of confidence from existing customers and a loss of future business from new customers. On a personal level, both Fred and Sarah are at risk of losing their jobs, and a reputation for deceitfulness would make it difficult to find comparable employment elsewhere.
From the standpoint of sound business practice, it would be unwise to follow Fred's proposal. The fact that he is Sarah's supervisor naturally adds an element of difficulty to her decision. She does, however, appear sufficiently confident to raise her viewpoint, and this is precisely what she should do.
Sarah's Ethical and Financial Alternative
Sarah's proposal addresses the same financial concerns Fred raises without resorting to deception. Her solution is both morally defensible and practically viable, offering projections that satisfy the company's need for profitability while maintaining transparency with customers. As the person directly responsible for the bookkeeping, Sarah has the technical expertise to demonstrate why her approach is the more sustainable choice. The ethical path, in this case, is also the smarter business strategy.
Conclusion: Ethics as the Better Business Path
If Sarah does lose the case, and her job as a result, her reputation would nonetheless remain intact. Indeed, her standing as a person of exceptionally high business ethics would precede her, and she would have little difficulty finding similar employment elsewhere. For these reasons, it is clearly better for Sarah to follow the ethical proposal, both for her own protection and for the integrity of the business as a whole.
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