Reference no: EM13876502

Ethics Jan Williams was recently hired as assistant controller of GroChem, Inc., which processes chemicals for use in fertilizers. Williams was selected for this position because of her past experi- ence in the chemical processing field. During her first month on the job, Williams made a point of getting to know the people responsible for the plant operations and learning how things are done at GroChem.

During a conversation with the plant supervisor, Williams asked about the company procedures for handling toxic waste materials. The plant supervisor replied that he was not involved with the disposal of wastes and suggested that Williams might be wise to simply ignore the issue. This response strengthened the resolve of Williams to probe the area further, to be sure that the company was not vulnerable to litigation.
Upon further investigation, Williams discovered evidence that GroChem was suing a nearby resi- dential landfill to dump toxic wastes. It appeared that some members of GroChem's management team were aware of this situation and, in fact, may have been involved in arranging for this dumping; however, Williams was unable to determine whether her superior, the controller, was involved.

Uncertain as to how she should proceed, Williams began to consider her options by outlining the following three alternative courses of action:

1. Seek the advice of her superior, the controller.

2. Anonymously release the information to the local newspaper.

3. Discuss the situation with an outside member of the board of directors, with whom Williams is acquainted.

Required

1. Explain how the use of a cost-of-quality (COQ) reporting framework can facilitate better managerial control and decision making regarding environmental costs and potential liabilities.

2. Discuss why Jan Williams has an ethical responsibility to take some action in the matter of GroChem, Inc., and the dumping of toxic wastes. Refer to the specific ethical standards contained in the IMA's Statement of Ethical Professional Practice (www.imanet.org) to support your answer.

3. For each of the three alternative courses of action that Jan Williams has outlined, explain whether or not the action is consistent with the ethical standards referred to above.

4. Without prejudice to your answer to (3), assume that Jan Williams sought the advice of her superior, the controller, and discovered that the controller was involved in the decision to dump the toxic waste pro- duced by the company. Refer to the IMA's Statement of Ethical Professional Practice and describe steps that Williams should take to resolve the situation.