Renaldo's Boutiques, Inc., has 14 stores located in a midwestern part of the United States. Renaldo, the president of the company, has set budgets for each store that do not allow for lost, stolen, or misplaced merchandise (inventory shrinkage). Research shows the disappearance of store merchandise is attributed to a combination of internal and external causes.

Customer theft35 percent

Employee theft40 percent

Administrative errors18 percent

Vendor dishonesty7 percent

Which philosophy do you believe Renaldo is following?

Multiple Choice

• Behavioral approach
• Total Quality Management approach