Internal Control and Home Improvement

Topics: Internal control, Fraud, Lowe's Pages: 6 (1937 words) Published: February 8, 2013
Ethics in Corporations
Lowe’s Home Improvement is a chain of retail home improvement based in the United States. It was founded in 1946 in North Wilkesboro, North Carolina. Lowe’s Home Improvement has expanded internationally into Mexico, Canada, and joint venture with Woolworths Limited in Australia. Lowe’s Home Improvement ranked 54 in Fortune 500 for 2012, decreasing four spots in 2011 ("Cnn money," 2012). Lowe’s Home Improvement is the second largest retail home improvement chain, behind The Home Depot. There are 1,724 Lowe’s stores throughout United States, Canada, Mexico operating with more than 234,000 employees ("Lowe's home improvement, 2012”).

Stakeholders are individuals, groups, or organizations that have a stake in the business. Stakeholders are categorize into two types: internal or external. Internal stakeholders can be owners, managers, and employees. External stakeholders can be suppliers, lenders, and customers (Worthington, 2009). Human Resource (Safety)

There are many safety rules in Lowe’s Home Improvement. “We strive to sustain a safety culture that integrates safety into all parts of our business. Safety is a core value of our company. We hold our leadership teams accountable for creating and maintaining a safe environment to work and shop. Safety practices are incorporated into each job task, and we believe training is critical to ensuring safety awareness and knowledge are maintained at the highest level” ("Focusing on safety," 2012, p. 1).

When I was the Department Manager of Product Service, I was in charge of 70 percent of all resets in the store including display changes, merchandising refresh, and general product rotation. As an internal stakeholder (manager), I knew all the rules. However, some of these rules prevented me from accomplishing my job. Sometimes resets require me to get inside the bay to maneuver the products, beams, or shelves. This is strictly against Lowe’s policy, which states I should get an order picker (machine to hold me up). I understand the need for the rules, but sometimes they cannot be followed exactly (prior thoughts as a Department Manager). If I were to get hurt while doing, Lowe’s is liable for my injuries or death. Even though it clearly states it in our policy not to do these actions, it could not be proven that I was properly trained or ever informed about it. This is why it is important for all incidents to be reported. As an Assistant Store Manager, I must constantly coach and train my associates and document (validate). I must ensure every decision my employees makes is what is best for the business.

Employee incidents are known as workers’ comp claims that directly affect profitable. When the store reports the incident to our claims department, we are automatically deducted profits to pay for the expense. This can range from $10,000 to whatever. . Just recently, we had to pay for knee surgery for our outside sales representatives. Unfortunately, these claims can take many years to close, because the individual can continue to get treatment even after surgery. Typically, workers comp will attempt to pay the individual out before paying for surgery. If the individual accepts the buyout, they will lose their job.

An external stakeholder is the customers that come in the building. Lowe’s is just as liable for any injuries or damages caused to a customer as an employee is. Every morning an Assistant Store Manager must walk the Daily Safety Review (DSR) to verify the store is clean, clear, and safe. We must verify that all top stock, product, safety procedures, locks, and safety chains are up and operational. Recently, someone did not properly place a stack of trashcans in top stock. The trashcans were not standing on the tops and fell around 11:30am, luckily no customers or employees were hit with ten trashcans as they fell.

Customer incidents are known as general liability claims that directly affect profitable. When the store reports the...

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