Management Accounting - Essay Example

Secondly, the fear of under-budgeting, which will have the impacts of causing financial crisis for the department in the coming year, also affects the way she is going to deliver the budgeted amount. Anticipated future rise in costs is yet another factor that she has to consider in her decision making regarding the budget she is going to submit, since the costs may rise out of the anticipated new expenditures. Finally, the financial situation of the city affects her decision making, since the revenues collected by the city were down, meaning the possibility of the city cutting down the budgets presented, thus reducing the amounts given to Paxton, as the manager of the waste disposal firm.

The analysis of the ethical dilemma under this case presents various ethical issues. First, Paxton is working towards satisfying herself interests, which is highly unethical (Rhodes, 1986 p11). She has the personal interest of being promoted from the department, which she does not appear like. Therefore, she wants to impress her employer by ensuring that she funds the operations of the department to the very best, at the expense of the financial situation that the city is facing. Paxton understand very well that the city’s tax collection for that year were down.

Therefore, she anticipates that the city may not have sufficient funds to cater for all the financial needs raised by the departments. This notwithstanding, she wants to ensure that she is not affected by the bad financial situation, through inflating her budget, so that even if it is cut, she will have no shortages. This is selfish on her part, since she does not care about the other departments and their financial needs, which is unethical (Harding, 2010 p55). Having understood the financial situation facing the city, she is supposed to be concerned about the other departments,