|A CEO (Peter) of a $600 million subsidiary called you (an ethics consultant) on a Sunday evening, and told you he needed some urgent advice.
He was having a meeting the next morning with the Director of Sales and HR Director. There have been a range of issues relating to ethics in the firm which he needs to deal with. Both issues relate to the use of company funds to purchase work-related items. The details are explained below.
Issue 1 – Expense claim for work-related ipad
It seems that a salesperson (Sally) had purchased an iPad with personal funds because the clients in her territory frequently had to send her equipment plans to review and needed a quick turnaround. The device allowed her to rapidly respond, keep an archive of past plans and not have to carry a laptop around.
Her District Manager (David) learned of this when Sally casually mentioned it last week. David told Sally she was very innovative and should not have to bear that expense. He instructed her to reimburse herself by charging a fictitious client lunch once a week until the iPad was paid off. At a regional meeting Sally mentioned the arrangement to a colleague, who then asked his District Manager (Brian) for the same arrangement, who said no.
The CEO asked the consultant (i.e. YOU) for advice. Here’s what they established from the case:
• There was no personal gain or attempt for personal gain
• The company had no reimbursement policy for these devices
• The District Manager (David) had initiated the unethical procedure
• Sally could have refused, but did not
• A clear message had to be sent since this was now public knowledge
• David and Sally both had excellent track records.
The Director of Sales wanted a slap on the wrist for David, and the HR Director wanted a termination. There was disagreement about how Sally should be treated.
1. What would you recommend for each of the following employees and why?
2. What action would you recommend that the organisation take to ensure this doesn’t happen again?
Issue 2 – Bulk purchase of iphones from store owned by family of District Manager
Another District Manager (Justine) has used company funds to purchase iphones for all of her sales team. This is in accordance with company policy and she has followed the relevant procedures. However, she insisted that the purchase was from one particular store in the city. Nobody noticed this was a problem until the CEO (Peter) was asked to sign off on the expense. He remembered from a previous conversation that Justine’s brother owned a shop which sold mobile phones in the city. He did some research and found out that the phones were all bought from Justine’s brother’s shop. Research also showed that the cost per phone was very competitive. Peter confronted Justine with this information. She indicated that she had been able to get an excellent price because he brother did her a favour, so she had saved the company money. She didn’t see there was any problem with how she had acted.
1. Do you think Justine did anything wrong?
2. Do you think she should face any consequences for her actions?
3. Would you recommend any changes to company processes as a result of this situation?
4. Would you have responded differently to any of these questions if you knew that Justine had received $100 as a thankyou gift from her brother for sending the business his way?