1.Describe some of the weaknesses in Jennings's ethics program.

2.Discuss the alternatives for Yang.

3.How has Zara been given the opportunity to engage in misconduct

An Ethical Dilemma* Yang interned with Jennings Department Store for two the form of performance bonuses, overtime incentives, summers. This experience helped him get promoted and off-hours work. He knew this was in violation of to section manager once he graduated. Although Yang company procedures, yet he couldn't definitively prove was young and most of the people he managed were Zara was actually taking the shrinkage money and using older, they respected him because of his expertise and it to achieve the high performance that had become ability to form good relationships with his coworkers and her trademark. It wasn't as if the employees were being customers. overpaid, compared to top management's 700:1 income Several weeks ago, Yang began to hear rumors about disparity ratio. Most employees just scraped by, as was one of the unit managers, Zara. He checked Zara's past evident by the company's high employee turnover rates. financial reports and verified she was one of his high But Zara's turnover rate had always been low. performing managers. Her unit posted the highest sales Yang could not definitively say whether Zara volume and growth, received positive customer feedback, was stealing, but he did know there were some cash and showed excellent cost control. The unit's employees purchases that were not recorded properly. However, also did consistently well on inspections. In fact, Zara Zara was officially getting the money, whether through consistently rated higher than all the other managers for theft or simply by "keeping the change" the customers the last two years. Yang wondered why she hadn't been gave her for purchases. He knew that because the funds promoted, so he decided to investigate further. were not listed as income, the extra "wages" to Zara's Over the next few weeks Yang began talking employees meant no payroll taxes were being withheld. informally to those that knew Zara. He heard the same This meant Jennings was at risk for a tax liability action story over and over again. Zara was kind, firm, great with by the IRS. the customers, and looked out for her employees. Zara Yang thought about what to do. He looked even had a dedicated group of customers that followed through the company's ethics code but found the her on social media. Even though Zara had not graduated guidelines vague. The code itself only spanned two from college, she took night classes and was about a year pages and did not provide any contact information away from her management degree. for him to ask questions. Yang murmured under his Next, Yang spoke to some of Zara's retail clients. breath, "Why did I start this mess? Should have left They spoke highly of Zara's advice on shoes, dresses, and things alone." He knew nothing at a company is secret for jewelry. Some told him they routinely came in to give Zara long. and his questions would soon alert others to start holiday gifts. He discovered the store was doing so well asking questions. On the other hand, he knew this had in large part because this one employee cared about her gone on for quite some time. Why had nobody noticed clients and workers. Yet as he questioned more clients, before? Yang found something rather odd. Some of the customers told him that for small items they handed Zara cash and QUESTIONS | EXERCISES told her to keep the change. Yang soon discovered these 1. Describe some of the weaknesses in Jennings's ethics sales were not rung up. Next, he checked the store's program. shrinkage measures (items that may have been stolen 2. Discuss the alternatives for Yang. or damaged). The records indicated some shrinkage but 3. How has Zara been given the opportunity to engage in nothing significantly excessive. misconduct? After a few weeks of investigation, Yang began to suspect Zara used the money or cash as unrecorded *This case is strictly hypothetical; any resemblance to real persons, payments to her retail staff. She gave the money in companies, or situations is coincidental