Check Policy at Dorchester Stores
Not what you're looking for?
Anita Zurbrugg was just hired as the assistant treasurer of Dorchester Stores. The company is a specialty chain store with nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Anita will manage. Her primary responsibility is to maintain the company's high credit rating by paying all bills when due and to take advantage of all cash discounts. Chris Dadian, the former assistant treasurer who has been promoted to treasurer, is training Anita in her new duties. He instructs Anita that she is to continue the practice of preparing
all checks "net of discount" and dating the checks the last day of the discount period. "But," Chris continues, "we always hold the checks at least 4 days beyond the discount period before mailing them. That way we get another 4 days of interest on our money. Most of our creditors need our business and don't complain. And, if they scream about our missing the discount period, we blame it on the mail room or the post office. We've only lost one discount out of every hundred we take that way. I think everybody does it. By the way, welcome to our team!"
Instructions
(a) What are the ethical considerations in this case?
(b) Who are the stakeholders that are harmed or benefited in this situation?
(c) Should Anita continue the practice started by Chris? Does she have any choice?
Purchase this Solution
Solution Summary
The solution describes a solution to a problem with the check depositing policies at Dorchester Stores.
Solution Preview
(a) The ethical considerations in the case include post dating checks and holding them knowing that they will not arrive at the payee before the discount period ends in an effort to 'double dip', getting a discount on purchases and earning additional interest on the money the checks are drawn against. The only way to conduct this task ethically is to write the date on the check using the date the check was actually written and to mail promptly. In addition, if the firm intends to take a purchase discount, they must ensure that the check not only is mailed prior to the end of the period, but actually arrives at the payee before ...
Purchase this Solution
Free BrainMass Quizzes
Operations Management
This quiz tests a student's knowledge about Operations Management
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.