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Steelers Steel Fabricators: Ethics Case

Essay Instructions:

Ethics Case

Spring 2021

 

Steelers Steel fabricates custom steel plates for both civilian use and for military procurement projects.

 

In the military contracts payments are calculated by [(DM+DL+OH) x 1.20]. The 20% add-on is the profit. This is referred to as a “cost plus” contract.

 

The military contract requires cost accounting, including overhead (OH), to be “reasonable.”

 

Steelers uses an overhead allocation formula designed to fairly allocated the cost.

 

You are Pat the controller.  Joe the CEO and Cindy the CFO meet with you.

 

Joe: “Could you allocate more of the overhead to the military contracts so our cost is higher and the 20% would be higher?

 

Pat: “Our current system is designed to be a fair process.”

 

Cindy: “But we could alter the process and still be inside the bounds of “reasonable?”

 

Pat: “Well, somewhat, but only because fair and reasonable are not exactly identical.”

 

Joe: Ok, have me some pro forma numbers by Tuesday.

 

 

Discuss the ethics of shifting overhead to the military contract. Do not do a legal analysis, a different thing. Should Steelers stay with a “fair” standard or manipulate the numbers within the bounds of “reasonableness?”

 

2 pages plus a cover.

 

This is not a research project and I am more interested in the quality of your thought rather than a single correct answer.

Essay Sample Content Preview:

Steelers Steel Fabricators Ethics Case
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Steelers Steel Fabricators Ethics Case
The case requires determining whether the Steelers Steel Fabricators should operate based on the principle of "fairness," or "within the boundaries of "reasonableness." The company fabricates custom steel plates for the military procurement and civilian consumers. Their policy allows the accounting process to be done within the confines of "reasonableness," and "fairness." Notably, this principle allows for accounting discretion. Nevertheless, based on ethical principles outlined by utilitarianism and Kant deontology, the discretion should be limited within the boundaries ensuring maximum utility for all stakeholders. The Steelers Steel Fabricators are justified to operate within the principle and confine of "reasonableness." 
Ethics Principles 
Moral relativism, Kant deontology, and utilitarianism models outline ethical guidelines critical to decision-making in this case. Moral relativism postulates that there is no constant rule of morality and that morality varies depending on culture, place, and time (Wreen, 2018). For instance, another steel company has different internal organizational culture from that of Steelers Steel Fabricators. The concept implies that organizations are not confined to operate within a static moral or ethical approach. An organization can change its decisions and actions based on circumstances as long as they are within acceptable ethical conduct. The Kantian deontology model outlines the concept of categorical imperatives critical to determining whether an action is ethical. Notably, one has to treat its subject as the end, not the means to the end (Ramaswamy, 2018). Also, one has to consider the universal implications of an action. The tenet of universality indicates that an action is moral if it would be acceptable when applied universally. Finally, th...
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