Please read attached discussion and respond with 1 page substantial response.
· Sanjon has worked for the South Insurance Company for the past 23
years. He graduated with a top-notch accounting degree and also has his
MBA. Bar none, Sanjon is considered by everyone in his organization to
be a brilliant accountant. At issue is that Sanjon’s brilliance may be
coupled with just a little too much “creativity” when one considers his
approach to maximizing the company’s profits.
At the end of every quarter, Sanjon calls up the supervisors of each of
South’s insurance branches and asks them to estimate their outstanding
insurance claims. These insurance claims represent money that the
company likely owes its customers—that is, claims are estimates of money
owed at the end of the quarter to South’s customers who are likely to
file a claim in the near future, but who have not yet done so. (The
total money owed—but still outstanding—is referred to as a “claims lag,”
since there is a lag between the date of an insurable event and the
date that South becomes aware that a customer has filed a valid claim).
For instance, based on historical experience, at the end of each
quarter, Division 1 of South Insurance estimates that 20% of all claims
for that quarter are still outstanding (i.e., an insurable event has
occurred, but has not yet been reported to Division 1). This is the
number (20%) reported to Sanjon. Being the “brilliant” accountant that
he is, and in light of his sheer eagerness to maximize profits for the
quarter (and because his quarterly bonus is based on each quarter’s
profits), Sanjon reduces the outstanding claims reported by all of
South’s insurance divisions by 10%. In doing so, he has effectively
reduced the company’s quarterly claims expenses by this same 10%—and
voila!— Sanjon has also managed a creative increase in his own quarterly
Sanjon sees nothing wrong in reducing the divisions’ company claims
estimates, reasoning, “Look, they’re all a bunch of estimates anyhow!”
Sanjon further opines, “Besides, I have a duty to this company and to
its stockholders—to maximize profits!”
Consider this situation from a virtue ethics perspective. What virtues are at stake?
Does Sanjon appear to be rationalizing his behavior as a “duty” to others?
On a scale of unethical (1) to ethical (5), where would you rate Sanjon’s practice? Why?
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where would you rate Sanjon’s practice? Why? was first posted on July 18, 2019 at 8:05 am.
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