Problem
According to the following Sportsmax scenario answer these questions:
• Detail the ethical conflict/dilemma that Robert Manning is facing.
• As the president and CEO of SportsMax, how can you motivate Robert to always provide an accurate operating budget?
SportsMax sells sporting goods equipment at 100 stores throughout North America. Robert Manning is the manager of one SportsMax retail store in Chicago. The company is in the planning phase of establishing its operating budget for this coming year and has asked that all store managers submit their estimates of sales revenue, costs, and resulting profit. During the control phase, each store manager is evaluated by comparing budgeted profit with actual profit. Store managers who exceed budgeted profit are given a bonus equal to 10 percent of actual profit in excess of budgeted profit.
• Describe the ethical conflict that Robert Manning is facing.
• As the president and CEO of SportsMax, how might you motivate Robert Manning to provide an accurate operating budget?