Question

1.Tinikits, Inc. is the manufacturer of miniature models, especially of automobiles with historical interest. The company is developing new standard costs. Trent Roswell suggests that the new standards for materials should not include any waste for liquid plastics that spill out of the molds. "After all," he says, "We're trying to be a world class company. When we build in waste, we tell the workers it's okay to waste some." Mary Farrell, another manager, disagrees. "If we don't allow for some normal human error,"she says, "we'll have a mighty unhappy work force. Also, I think that these kinds of perfection standards exploit the workers. I certainly wouldn't want to be held up to perfection every day — what could I do but fail?" The argument continued. Finally, the standards were prepared. All standards were prepared according to normal expected performance, except that for materials, an ideal standard was used. Mary, still maintaining the unfairness of the system, refused to hold her workers accountable for materials quantity variances.

Required:

a. Are ideal standards unethical? Explain briefly.

b. Is it unethical for Mary to refuse to support the standards? Explain.

Answer 1

a)Ideal standards are not necessarily unethical. They may be used unethically, such as in the case in which employees are denied bonuses or other rewards because of not meeting a standard which was out of their reach. If they are used as a guide to maximum attainable performance, however, and not tied directly to the reward system, they may be ethical.

b)It is unethical for Mary simply to refuse to accept a particular standard. However, if the company intends to use the standard unethically, she may refuse to hold her workers accountable while she pursues a permanent disposition of the matter. If she simply refuses to accept it, she may be indirectly sabotaging the company by hindering it from accomplishing its legitimate objectives. This would be unethical.