As a project manager of a large project, the customer asks you to inflate the costs by 25 percent. His reasoning for asking for this is that management always ends up reducing the costs of the estimates and so inflating costs is the only way to get the money needed to complete the project. What is the ethical and appropriate response to this situation?

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Social Studies

Jaydan Cabrera

25 October, 21:08

As a project manager of a large project, the customer asks you to inflate the costs by 25 percent. His reasoning for asking for this is that management always ends up reducing the costs of the estimates and so inflating costs is the only way to get the money needed to complete the project. What is the ethical and appropriate response to this situation?

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Elena Lane · Answer 1

In a system of outcome-based ethics, the appropriate response would be to follow the customer's advice because what is paramount is the completion of the project. It is what is convenient for the business, the shareholders, and the project manager himself.

In a more morally-based ethical system, the appropriate system would be to either to refuse to inflate the costs, or to raise these costs only minimally. This in order to maintain financial similarity between reality and what was estimated. An ethical person also would opposed the furtherance of this practice of undervaluing costs in order to win licitations.