Narges is a store manager in the Vancouver location of Elysia Kim Fashion's Inc. ("EKF"), a

moderately profitable international women's fashion store with over 100 locations in 65

countries around the world.

While EKF has struggled in the retail industry with flat sales and heavy competition from other

women's fashion retailers, for the first time in four years EKF showed a modest rise of four

percent in its annual net profit from its worldwide store sales. This prompted the company to

reinstate its Christmas bonus of $200 for full-time and $100 for part-time employees in the

profitable stores, a practice EKF suspended during the non-profitable years.

Narges initially secured a position as a salesclerk with EKF Vancouver seven years ago. She was

a very conscientious and diligent employee with a friendly personality that colleagues and

customers loved. Her former store manager took notice of this and fast promoted Narges to an

assistant manager position.

When the store manager decided to move to EKF's Toronto, Ontario location, she

recommended Narges to EKF's Western District manager as her successor in the Vancouver

store. The Western District manager met with Narges and immediately took a liking to her. She

hired her on the spot to replace store manager.

While Narges's promotion to the store manager position came with an increase in pay, it was

only marginally more than the sales clerks' she supervised made and certainly, not sufficient to

allow her to comfortably support her family.

Narges resides in Vancouver, British Columbia with her disabled husband and their twin fifteen-

year old daughters. She isthe sole breadwinnerin her family. Narges's husband was injured at

work in an industrial accident five years ago. He was permanently incapacitated and has been

unemployed ever since. He receives a small disability pension, which partially pays for the

family's very modest two-bedroom rental apartment.

The twins, both grade 8 students in the local high school, have friends and classmates who

frequently wear the trendiest teen fashions and gadgets supplied by their well-to-do parents.

The girls oftenasked Narges to buy them expensive clothes, shoes and accessories but Narges

was unable accede to their requests.As the sole breadwinner in the family, Narges has more

pressing concerns to deal with suchas unpaid bills for utilities, credit card debt and

transportation costs for the family. Her income and her husband's disability cheque did not

cover all of the family's costs and Narges almost never had any money left over at the end of

the month. In fact, she often had a deficit that she covered by using her credit cards. She found

herself withmounting credit card debt and no way to pay the balances when they were due.

Nargesoften had to rely on the charity of the local food bank and her friends and relatives to

make ends meet. She received assistance from them in the form of non-perishable food items

like canned goods, peanut butter, dry soups, pasta and the like. Her friends also gave her

clothes their kids either grew out of or no longer wanted because they were out of style. The

twins resented having to wear these 'hand-me downs.'

As a store manager, Narges was privy to the store's sales and knew that her store was doing

very well relative to other EKF stores. She approached the Western District Manager and

requested a 10% increase in her salary but she informed Narges that EKF's head office set

salaries and she had no discretion in the matter. The District Manager cautioned that it would

be futile to ask the head office for a raise as past efforts by others had been met with swift

rejection. As a result, Narges retracted her request for a raise.

While the retail clothing industry is known to pay their staff relatively low wages,EKF, in

particular, has a deserved reputation for paying its staff the lowest salaries in the industry.

Most of the employees at EKF stores were transient part-time workers between the ages of 18

and 25 years looking to make extra pocket money. They did not have serious objections to

making minimum wage working at EKF because they did not carry the responsibilities of

supporting a family like Narges did.

With mounting debt and family pressures, Narges was growing resentful. She felt that she had

little to show after working for EKF for seven years. She believe her prospects were limited at

EKF and felt unappreciated and undervalued. Desperate to earn more income to support her

family, Narges came up with a fictitious refund scheme that involved processing a transaction

as if a customer were returning merchandise, even though there was no actual return. She

discovered a weakness in the automated payment system, which allowed her to process false

returns and then credit herself using various pre-paid Visa cards.

After implementing the refund scheme for a couple of months and supplementing her income

by $300 to $400, Narges realized that each time she processed a false refund she had to enter

her employee identification code. She was concerned that EKF would find it suspicious that she

processed a disproportionate number of refunds relative to other employees. As a result, she

attempted to recruit three young and impressionable sales clerks, Sarvin, Medina and Jennifer,

to join her scheme.Narges felt that their involvement would divert attention from her and

enable her to share in the proceeds of their fraudulent transactions while keeping the refunds

she processed independently of them. She picked these particular employees because she had

mentored them at EKF.Sarvin, Medina and Jennifer viewed Narges as a mother figure and

often confided in her about their personal problems.Moreover, Narges held firing and

disciplinary authority over them and decided what shifts, if any, she would allocate them.

Therefore, Narges felt she could trust them to participate and not blow the whistle.

Narges felt particularly confident that Sarvin would be a willing participant. She had mentioned

to Sarvin, on more than a couple of occasions, an assistant manager position might soon be

available to her along with an associated pay increase. However, while Medina and Jennifer,

without any hesitation, joined Narges in making false returns, Sarvin felt conflicted and told

Narges that she needed to think about it.

Sarvin very much liked Narges and valued her mentorship, but she was brought up to respect

others' property rights. She often remembered the great hardship her parents experienced in

uprooting the family from East Africa to immigrate to Canada with a view to providing her and

her older sister safer and better lives and a good education. She did not want to disappoint her

family.

Although Narges assured Sarvin that there was no risk in participating in the refund scheme,

Sarvin feared the likelihood of being caught and losing her job. She had greater aspirations than

working for EKF for her entire career. She wanted to go to university and eventually to law

school and make her parents very proud of her. Working at EKF was a means to that end, as she

was saving tuition money from every pay cheque she received from EKF. Sarvin did not want to

jeopardize her job, future plans and potential career in law if she was caught, fired and received

a criminal record.

Narges, Medina and Jennifer are growing impatient. They are pressuring Sarvin to process the

false returns, too

(1) What are the alternatives available to Sarvin?

(2)What are the ethical issues?

(3)(i)Which one option above is consistent with the Utilitarian approach? [3 marks]

(ii)Which one option above is consistent with the Rights approach? [3 marks]

(iii)Which one option above is consistent with the Justice approach? [3 marks]

(4)What would you do if you were Sarvin? Explain your answer using one or more ethical frameworks you have learned in this course. I would suggest you consider perhaps frameworks that you were not asked in the previous question to show your understanding of other frameworks and ability to apply other frameworks too

(5)Who are all the stakeholders?Andwhat are the (vested) interests of each stakeholder?(i.e. what do they stand to gain or lose)