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Essay / Research Paper Abstract
This 5 page paper responds to specific questions about this situation. What caused the company to engage in unethical behavior, Were sales targets too high, Were the bonuses too tempting, Was the board of directors lax, and Why did ConAgra behave differently than Sara Lee. Bibliography lists 2 sources.
Page Count:
5 pages (~225 words per page)
File: MM12_PGfdsvca.rtf
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Unformatted sample text from the term paper:
difficulties meeting the required target, which left managers in an untenable position. Since they could not meet the target through their regular sales, they devised a way to make it
look like they did. This involved gaining the cooperation of at least some of their vendors. It also involved creative accounting practices. One part of the scheme was placing huge
orders from suppliers/manufacturers. The manufacturers, in turn, agreed to pay U.S. Foodservice various percentage rebates. The combination of large orders and rebates made it look like revenues in 2002 increased
by a large amount. All rebates were given to U.S. Foodservice in 2002 but some of the orders were not paid for until 2003. The regulation states that rebates must
be given in the same year as that bill is paid. They had so much inventory, they had to rent additional cold-storage and regular storage space. At least one
manufacturer agreed to go even further. Their sales representatives signed certain documents that made it look like U.S. Foodservice had higher sales than it did. What caused the company to
take this path was the unreasonable growth target placed on this company. Executives at the highest level were involved in these actions. Were sales targets set too high
by the parent company, Ahold? Yes, sales targets were too high. Financials for U.S. Foodservice could not be found and historical financials for the parent company, Ahold, could not be
accessed, although these would probably not separate out financial information for this subsidiary. The financials would provide knowledge about the gains or losses in revenues over the years from 1999
- 2002 when the company decided to take these drastic and unethical steps to make it look like they had reached the target gains. If there had been little
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