October 3, 2012.
A couple of employees from Westchester Distributing are accused of bribing a customer with $2 per case kickbacks in exchange for purchasing 100 cases of slow moving beer. Vincent Patton is faced with the challenge of making a decision based on ethics or company profitability. If Mr. Patton decides to fire all three employees, the company will not be able to run at full capacity. On the other hand, if he decides to ignore the situation, he will be promoting their actions.
Carter Mario was the salesman that initiated the illegal transactions with Mr. Moon. He thought the company wanted him to meet certain targets by any means necessary. Mr. Carter felt management’s expectations were unrealistic and needed more input from the ground level. George Pavlov was Carter’s sales manager. He was fully aware of Carter’s actions, but did nothing to stop him. In fact, over 50% of Mr. Moon’s kickbacks were covered under his expense reimbursements. Joe Roberts, VP of Sales, was unaware of Mr. Mario and Mr. Pavlov’s actions until Mr. Moon demanded a refund for the slow moving beer. Mr. Roberts should have gone straight to Patton instead of contacting Mr. Moon. Although Joe’s intentions were to prevent any future detriment to the company, he stole a neon sign to bribe Mr. Moon. Although the three employees had very different roles in giving Mr. Moon kickbacks, Vince Patton should fire all of them.
To prevent this from ever happening again, Vince Patton should implement internal controls. The costs associated with violating the CABC are too great to risk. If the plant is closed for 45 days, there will be a loss of sales, inventory could spoil, employees could begin to look for other jobs, and customers may switch suppliers. Westchester should have formal written procedures for employees to adhere by. This manual should not only state the policies and procedures to be...