A board of a local chain of auto repair shops sees that wait times for repairs is a major complaint among its customers. The board decides to set aggressive sales goals for its car mechanics and incentivize them to sell more parts. The board hopes that with this goal, the shops will have the incentive to see more customers and sell more parts, thus cutting wait times. Now that the goal is set, consider which of the following three possibilities is likely to occur: The car mechanics meet the sales goal by finding efficiencies in the repair processes and cutting down on wait times. They see more customers, repair cars more quickly, and sell more parts as a result. The mechanics cannot meet the goal—it was set too high and they could not see enough customers to make up the difference. Realizing the sales goal was too ambitious, the board revises the goal accordingly. Wait times are cut down, but not as much as the board had hoped. The mechanics cannot meet the goal—it was set too high and they could not see enough customers to make up the difference. However, instead of revising the goal, the board stresses that the viability of the franchise is at stake and offers increased commission to meet the sales goals. Now the managers encourage mechanics to offer parts to their customers that the customers do not need or to replace parts that do not need replacing to make the sales goals. As customers discover they are being sold parts they do not need, they begin to take their business elsewhere. You have likely heard of a company whose managers or employees exhibited unscrupulous behavior in order to meet targets or goals set by leaders. If managers misuse financial tools or calculations, they can paint an incomplete and deceitful picture of an organization’s financial reality, which can mislead investors, employees, or stockholders. Unrealistic or short-sighted budget goals combined with ill-thought-out reward systems can result in unethical behaviors as managers and employees strive to meet them in any way possible. Financial professionals need to be aware of how even the best-intentioned budgets can backfire when real people seek rewards (such as bonuses or promotions) to avoid compromising performance and risking their jobs. Explore the ethics of business planning and examine the metrics businesses can use to act in socially-responsible ways.

Then, complete the following:

Provide an analysis of the ethical considerations and consequences of business planning processes of which financial professionals must be aware as they work for any business.

Explain the role of business planning for executing a vision for positive social change.

Include how business planning can strive for positive social change whether or not the business uses a B-Labs assessment framework by discussing how metrics are used to support the mission of the business.

Answer rating: 100% (QA)

Introduction Unrealistic or shortsighted budget goals of company will lead to unethical business practices of the financial managers and the employees of the company would take unauthorized manner of ... View the full answer