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Ethics Case: New Assistant Treasurer

I need help with this scenario.

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!"

I need help with the questions below.

(a) What are the ethical considerations in this case?
(b) Who are the stakeholders that are harmed or benefitted in this situation?
(c) Should Anita continue the practice started by Chris? Does she have any choice?

Solution Preview

Anita is taking over Chris' position and Chris is training her in his old job.

When Chris was doing the job before he hired Anita, he paid all bills that the stores owed to creditors without fail but he took advantage of any discount incentives the creditors offered him if he paid the bill by a certain early date.

The trouble is, he prepares the checks and stamps dates on them that are the absolute last day before discounts expire. Not only that, but he also does not send the payment out right away. Instead he holds payments for a few days more in order to get additional interest on his money before it is paid out. He basically tells a lie to the creditor about why the checks did not get there shortly after they were cut (because the checks get there many days after the discount date has passed).

(a) What problems do you see with this situation -- specifically with how Chris handles his bill payment duties (now Anita's duties). This would identify the "ethical considerations" for question (a). In other words, has Chris been ...

Solution Summary

In a 750-word solution, the ethics of the training are discussed primarily with the effect to the stakeholders. No specific opinion is stated for what Anita should do, but there is a paragraph of considerations needed to make a decision about her.