Melody Lovelady is the most highly rewarded sales representative at Swift Corporation. Her secret to success is always to understate her abilities. Ms. Lovelady is assigned to a territory in which her customer base is increasing at approximately 25 percent per year. Each year she estimates that her budgeted sales will be 10 percent higher than her previous year’s sales. With little effort, she is able to double her budgeted sales growth. At Swift’s annual sales meeting, she receives an award and a large bonus. Of course, Ms. Lovelady does not disclose her secret to her colleagues. Indeed, she always talks about how hard it is to continue to top her previous performance. She tells herself: “If they are dumb enough to fall for this rubbish, I’ll milk it for all it’s worth.”

Required

a. What is the name commonly given to the budget game Ms. Lovelady is playing?

b. Does Ms. Lovelady’s behavior violate any of the standards of ethical conduct shown in Exhibit 1.15 of Chapter 1?

c. Recommend how Ms. Lovelady’s budget game could be stopped.