Question

Damage Expense Topic:

Violations of Internal Control Characters: Chris, New Distribution Supervisor at a large candy manufacturer Bob, Inventory Control Manager, Chris’s immediate boss Chris has been recently hired as the Distribution Supervisor for an international candy company. The plant is in a rural area and is about to begin a major expansion that will triple its capacity. The company has generous benefits and has paid all moving expenses for Chris and his family. During the move, however, the movers damaged a large piece of oak furniture. Chris has contacted the moving company. The insurance is by the pound and would cover only a small part of the worth of the item. Chris has explained this to the moving company, but it refuses to reimburse him for the item’s value. Chris approaches his supervisor, Bob, about the problem. Chris has been on the job about a month and enjoys the partnership they have developed to date. Chris had originally interviewed with Bob, and Bob’s recommendation had been a major factor in Chris’s getting the job. Chris has found the types of challenges he was looking for in a new position and is already becoming a major player in planning for the new expansion. Bob tells Chris that he does not think he can do anything to persuade the moving company to reimburse Chris and suggests that Chris pad his next few expense reports to cover the cost. Chris is surprised at Bob’s suggestion, because thus far Bob has dealt with him in a very evenhanded manner and has appeared to have strong business ethical standards.

Author: Originally developed by Michael Forget, graduate student at Washington University, as a class project in “Ethical Decision Making.” Edited and submitted by Dr. Raymond L. Hilgert, Professor of Management and Industrial Relations, Washington

These are some alternatives that Chris could take

Bad decision options:

1. Chris can go along with Bob's suggestion as he is going to be working along with Bob in the new company.

2. Chris can keep quite about the problem as he does not feel that anything can come out of arguing.

What are the pro and con of these alternative that chris could take and what are the best option that he can take with mention the pro and con for it?

Answer 1

Alternative 1: Chris can go along with Bob's suggestion as he is going to be working along with Bob in the new company

• Pros
  • Chris can cover the cost of his loss
  • Chris can build better rapport with Bob by listening to his advices
• Cons
  • This is entirely an unethical choice
  • Chris can get caught for padding and legal action can be taken against him

Alternative 2: Chris can keep quiet about the problem, as he does not feel that anything can come out of arguing

• Pros
  • Chris can be ethical
  • Chris can be considered as an honest employee
• Cons
  • Chris will not be able to cover the cost of his loss
  • Not listening to Bob’s suggestion, might affect the rapport between them

Best Alternative: Chris can approach Bob and higher management to get permission for filing complaint against the moving company

• Pros
  • Chris is going the legal way, which is completely ethical
  • Chris can be considered as an honest employee
  • There is high probability that his losses will get covered
• Cons
  • Not listening to Bob’s suggestion, might affect the rapport between them