Ronnie Fraenze is an accountant for Korol Company. Early this year, Ronnie made a highly favourable projection of sales and profits over the next three years for Korol's hot-selling computer PLEX. As a result of the projections Ronnie presented to senior management, management decided to expand production in this area. This decision led to relocations of some plant personnel, who were reassigned to one of the company's newer plants in another province. However, no one was fired, and in fact the company expanded its workforce slightly.
Unfortunately, Ronnie rechecked his calculations on the projections a few months later and found that he had made an error. His projections should have been substantially less. Luckily, sales of PLEX have exceeded projections so far, and management is satisfied with its decision. Ronnie, however, is not sure what to do. Should he confess his honest mistake and jeopardize his possible promotion? He suspects that no one will catch the error because sales of PLEX have exceeded his projections, and it appears that profits will materialize close to his projections.
Instructions
(a) Name the stakeholders in this situation.
(b) Identify the ethical issues involved in this situation.
(c) Consider the possible alternative actions for Ronnie. What would you do in Ronnie's position?