Question

ETHICS CHALLENGE EC 2-1 You are a cashier at a retail convenience store. When you were hired, the owner explained to you the policy of immediately ringing up each sale. Recently, lunch hour traffic has increased dramatically and the manager asks you to take customers' cash and make change without ringing up sales to avoid delays. The manager says she will add up cash and ring up sales equal to the cash amount after lunch. She says that in this way the register will always be accurate when the owner arrives at 3:00p.m. Required 1. Identify the advantages and disadvantages of the manager's suggestion. 2. Identify the ethical dilemma and evaluate at least two courses of action you might consider and why.

Answer 1

1. There are advantages to the process proposed by the manager. They include improved customer service, less delays, and less work for you. However, you should have serious concerns about the potential for fraud. In particular, there is no control over the possibility of embezzlement by the manager because there are no source documents* being prepared at the time of sale. The manager could steal cash and simply prepare sales receipts to match the remaining cash.

This case involves a conflict between the need for efficiency and the need for control in the form of source documents*. While it makes sense to take and process sales receipts quickly, this efficiency is being accomplished by a shortcut that greatly weakens control over cash receipts. That is, cash could be received and lost because there would be no source documents to verify the sales and cash received.

2. The managers explanation that the owner does not arrive until 3:00 p.m. suggests that the owner does not know about the proposed shortcut. Thus, the new employee is faced with the dilemma of deciding whether to accept the managers instructions, to confront the manager with the argument that the shortcut seems wrong, or to ask the owner to confirm the instructions. Each of these alternatives involves personal risk.

Initially, the best thing may be to simply work as instructed for a while in order to get an idea of whether the shortcut is being abused by the manager and perhaps to find out discreetly whether the owner knows about it. The relationship that develops between you and the manager may be of a nature that will allow you to explain your concern and convince the manager that the shortcut should be avoided. Even if the manager is not abusing this shortcut, there are other reasons for doing away with it, such as maintaining accurate records for tax reports and gathering marketing information. Also, the shortcut may result in fraud by other employees who might not be as honest as you and the manager.

If you conclude that the manager is committing fraud, you should report the situation to the owner as quickly as possible.