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.
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.
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.
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.
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 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.
She should then put her concerns in writing, along with a reiteration of her own proposal and projections of the profits and losses involved in each option. She should present these to Fred, together with a detailed oral explanation of why she cannot accept his proposal. She should also keep a copy of her written proposal for her own records. If Fred disagrees, Sarah should suggest that they bring both proposals to general management for a decision. Both Fred and Sarah should then present their written proposals and calculations to management.
If the decision favors Sarah, she can proceed with her own proposal rather than Fred's — the ideal outcome. There is, however, a possibility that management would side with Fred and prioritize profit over ethics and risk. In that scenario, the primary risk would fall on Sarah, since she would be the one responsible for maintaining the concealed books.
If management decides in Fred's favor, Sarah has several options. She could agree to engage in the unethical practice and accept the risk of being the first — and possibly the only — person incriminated. Alternatively, she could continue to apply pressure on management through resources such as workers' unions or legal aid. While this course carries its own risks, it would be in her best long-term interest.
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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