An Ethical Dilemma: A Case from the Aviation Industry
This case discusses a situation where an airline and their catering service were working together to falsify records in order to avoid taxation. The airline was pressed to reduce costs, and the catering service was eager to make it possible to stay on as the service provider for the airline. The airline was taxed about 30% more for daily catering costs over the $10 per crew member, per day limit. Because of this, the airline and catering service made an agreement to bill anything over the daily limit separately, as “extra passenger services”. The airline employee that discovered the indiscretion was unsure of how to address the fraud, either within the company or by reporting to the authorities.
Integrity was the IMA standard that was broken by the company in these transactions. If the company needed to save money, especially on taxation on these transactions, one option would have been to use a different catering service. The article states that this catering service was expensive. This would alleviate any ethical dilemma and would still allow the company to cut costs in this area.
In response to your peers, consider the following:
- Is the option that your peer presented the best to resolve the ethical dilemma? Why? Provide rationale that supports data findings for the stakeholders in the case study.
- Are there any additional options to solve the ethical dilemma that weren’t identified in the initial post?
- What other relevant quantitative and qualitative costs and benefits should be taken into consideration?
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