Question

Scenario:

Katie recently changed employers from a local motorcycle dealership in Colorado Springs to a slightly larger dealership in Denver, Colorado. Katie is now the controller of “Mega Wheels Inc.” Both dealerships sell Hurley Danielson brand motorcycles. A new Hurley model is flying out of the stores and the manufacturer can’t keep up with demand. Each region in the US has a Hurley regional manager that determines how many machines are allocated to each dealership in their region. Since the machines sell easily, success depends on these allocations.

Katie’s prior employer received about a dozen motorcycles per month and therefore struggled to be profitable. Katie is curious when she finds out her new employer is allocated over one hundred bikes per month. After the first few months another item caught Katies’s attention. Every month the President withdraws $10,000 in cash and tells Katie to record it as “miscellaneous expense”. When she asked several other employees about those withdrawals she learned that the President frequently gives “gifts” to the Hurley regional manager.

What are the issues Katie must address? How should she proceed?

Answer 1

As mentioned in the question, from Katie's branch, the president withdraws money in cash $10,000 and mention it in records as 'miscellaneous expenses'.

Later Katie comes to know that the Hurley regional is given gifts by his president and she could easily reconnect that this is the reason why her branch and her employees are getting over hundred per month to sell.

The issues related with this are :

• If the management comes to know about this, the president would be charged as a result of which the related branch can also get affected.
• The Hurley manager would also be punished for his wrong deed. And may he would be removed as the Hurley manager.
• All these events would disturb the business anyway and hamper the sales leading to decrease in profits.
• If it is not reported to the higher management the other branches would continue to suffer as they would be receiving less bikes to sell thus would have a low business.
• There is also risk on Katie, that if she colon plains, may be she is made to leave to organization as she would be speaking against the president.

These are the issues related with the case mentioned above. There are many threats to organization, its employees, other stakeholders and the business.

Now, to this, the action that should be taken by Katie should be that, she must report this issue to higher authorities. This would be an ethical approach to the problem. She should explain each and every thing to the responsible authorities and authorities would be taking decisions to look after the matter and settle the issue.

Her this step would urge the Hurley manager to distribute equal number of bikes for sale in all branches in a region. This would lead to a fair competition in the market. And thus would have no partiality being going on.

Also, it would save the revenue of the Katie branch, which the president invested on the Hurley manager.

So, it's the best step that must be taken by Katie.