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Adopting a budgetary performance evaluation as a way of rewarding the most performing employees in organization can lead to employees adopting unethical techniques that will qualify them for the reward as it is in the case of John Jameson. The actions of John Jameson, plant managers and sales supervisors to accounting for the previous year’s sales in the current year and accounting for the purchases of this year in the past year raises various ethical implications. It is unethical for them of the company to manipulate the financial report for personal gains. Ethically, the manager is supposed to give the financial report that reflects the operations of the company for a given period of time in a transparent, fair, and truthful way (Arora & Katyal, 2009). When observation corporate ethics, the management is supposed to ensure that they have subordinated their personal interest to that of the organization. As such, the actions by John and his subordinates to manipulate the financial report to meet the personal interests is unethical.
The subordinates, plant managers and sales supervisors are supposed to report the unethical practices of their manager to the senior management of the company, otherwise, by implementing John’s request regardless of them being unacceptable makes them unethical. Ethics require them to report any information that they are aware of which is not in the interest of the company. The actions of manipulating sales, budgetary estimates, and material purchases by John, plant manager and the sales supervisors dent the reliability of the regional financial reporting. It has a negative impact on regional cost behaviors as it promotes over estimation of expenses, and underestimation of sales. This makes it difficult for the parent company to estimate the expected performance from the region accurately. The budgetary estimates by John Jameson as a regional manager cannot be relied upon to make important decisions such as investment, and other strategic decisions (Duska, Duska & Ragatz, 2011). The master budget of the organization does not reflect the true estimate………………………..