Question

Case study Susan Chumley has worked at Suspenders Ltd for six months and has been appointed a team leader. In the time she has been there, out of the eight members of her team who were there when she joined three have left and one is on long-term sick after having a breakdown. She has to attend meetings of other team leaders and supervisors. At one of the meetings she was told that certain suppliers were to be given ‘special payments’ providing certain delivery and quality targets were met. These were to be paid directly to named individuals and arrangements would be made to pay them in cash. In the records these were to be described as ‘advisory fees’. Susan and her colleagues were told only to deal with these named individuals and no one else. After work her friend Maureen asked Susan if she would like some electrical goods that had been ‘damaged’ in the stores. Maureen revealed that stores staff regularly siphoned off consumer electrical goods and sold them cheaply to staff – suppliers simply replaced any damaged goods and didn’t ask for them to be returned so this practice was simple and effective. Maureen had bought a 42-inch plasma television for £100 from one of the stores staff. Susan declined. At home Susan’s daughter asked her if she could have some paper and pens for school. Susan said she would bring home a packet of paper and a box of pens the next day from the stationery store. Next day Susan finished her work, messaged a friend in Cyprus on Facebook and bought some new outfits for work from some online shopping websites. She then went home, remembering to take with her the pens and paper her daughter wanted.
Discussion Questions	Marks
How has the behavior of the staff been influenced by the ethical behavior of the company? What are the ethical issues in Susan’s behavior? Is her behavior acceptable or excusable in any way? How should management deal with incidences of such behavior by staff? What processes and procedures could be put in place to reduce incidences of this type of behavior by staff and what should management do to make them effective	3 3 2 1
Presentation, clarity and layout of the submitted assignment	1
Total Marks	10

Answer 1

1) Clearly the staff has been behaving unethically and has been influenced by unethical behaviour from management. The management decision to pay supplier special payments when the payments are already contracted under purchase order for timely delivery and quality requirements is clearly unethical. Also classifying such payments as advisory fees amount to financial fraud. Therefore, unethical practices have been happening from the top level and this has influenced negatively the behaviour of junior level management and staff.

2)The ethical issue in Susan's behaviour are the use of pen's and paper or stationery items for personal purpose. These are property of the company and hence cannot be used for personal use. Also, Susan knew about unethical practices in the company and has not raised these issues in meetings nor raised any alarms about declining ethical behaviours. She is also a participant to such unethical behaviour although on low-value terms. Her behaviour is not excusable nor acceptable as this can lead to more unethical behaviour which may lead to major costs for the company.

3)Management should take stern action against such behaviours especially the executives involved in payment benefits for suppliers should be fired and so should Maureen and other staff involved in siphoning electrical goods. Susan should be given a warning and it should be explicitly stated that stationaries should not be taken for home use.

4) The management should put in an auditing practice to audit inventories in place. Also, scrap and rejected materials should be discarded as soon as possible either sold for resale or scrap. Proper inventory data should be maintained and regular or surprise audits should be carried out. Random checking should be done by security and CCTV should be placed in the factory premises. Management must review the audit processes and procedures from time to time and should hold the individual managers responsible in case of mismatches.