Ba 3102-703 Robbing Peter to Pay...Peter

James Dean

BA3102-703

Analysis Paper #1

28Oct 2017

Case: MNGT C, Robbing Peter to Pay…Peter

Section I.

        Iris, the divisional manager, is the role of the decision maker in the Robbing Peter to Pay…Peter case whose role I am assuming in this.  The basic choices I have as the manager evaluating Paul are if I should take action in reprimanding or punishing Paul for theft, or turn the other way and look past the stealing from the company.  Another thing that I think should be looked at is what avenue should be taken if it is decided that Paul should be held accountable for his actions.  It could be decided that Paul needs to be terminated for the embezzlement of the money.  The other option would be to have Paul stop taking the money the way he is and begin keeping records of the transactions for bonuses, overtime incentives, and cleaning wages.  Having these items paid out of the proper channels.

[pic 1]

Section II.

        The decision options which I can make would be looked upon very differently from different ethical standpoints.  From a utilitarian standpoint, it would seem that reprimanding Paul but adopting his ideas of overtime incentives, bonus-pays and off-hour cleaning wages would be in the best interest of the company, the customer base, as well as anyone else involved.  The company should in no way condone theft or let it’s other workers know what was taking place in Paul’s restaurant regardless It should also take steps to try and prevent this type of theft from occurring in the future.  In performing a stakeholder analysis, as is recommended in Deckop’s chapter when conducting a utilitarian analysis, it is easy to see that stopping the theft of sales but implementing the ideas Paul is using company-wide is in the best interest of all involved. (Deckop)  

To terminate Paul, would benefit no one, except possibly Iris for catching internal theft.  But even with that, she may have possibly been rewarded more if she talked with Paul, stopped the internal theft, and figured out a way to fund what he was doing with the money.  It seems obvious that the small amount of money he was misappropriating was benefiting the company much more than hurting it.  The restaurant which Paul manages is doing far better in all categories currently. That speaks immensely as to his management skills and value to the company.  What he is doing is wrong in the sense that he is not using the proper channels and is putting the company at risk for tax liability action from the IRS.  To look the other way and not address the issue would not be acceptable.  Not only would it mean to allow a wrong to continue unchecked, it would also not take advantage of the way the situation could help the company as a whole.

From a profit maximization perspective, I also believe it would be in the best interest to retain Paul as an employee.  Adopting the manner in which he pays bonuses and incentives on a company-wide basis.  Only he would need to be reprimanded for his actions and instructed to start record-keeping of all incentive payments. Moving forward, they shall be paid through the company financials.  This would be in-line with how Milton Friedman explains profit maximization. Friedman states “He has a direct responsibility to his employers.  That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of society, both those embodied in law and those embodied in ethical custom.”   To me this is to mean that while what Paul is doing is wrong in the fact that he is not deducting taxes, this can be corrected and his management tactics should be spread throughout the company. (Friedman)

The universalist point of view in this case would be that Paul must be discharged from his employment with the company.  This would be because Paul is technically committing theft.  Although he is not personally profiting from the taking of the sales money, he is still taking money, which is in itself wrong.  It goes back to the two key principles associated with Universalism.  As wrote about in Deckop’s writings, “Would you get what you want if everyone did it, under similar circumstances?”  This was also considered a “categorical imperative” by Immanuel Kant, a historical writer from the 18th century most associated with universalism.  Paul’s actions would not be considered ok for everyone in the company to be doing.  If all workers began pocketing sales most would not use the money in the manner in which Paul had.  Even if they had used the money in the same manner, it would still be an issue because now you would be talking about a far larger amount of sales being taken.  This would most likely affect the company’s total revenues as well as the profits of individual restaurants.  This does not even go into the far larger amount of funds being paid out without income taxes being deducted if everyone were to do what Paul is. (Deckop)

Something else I would like to reflect on concerning Paul’s actions are how they would be looked at by someone like Stephen L. Carter.  As Carter puts it, “one cannot have integrity without being honest.”  What Paul is doing with taking the sales money and using that to fund his employee’s additional payments.  Paul knows what he is doing is wrong, yet he is doing it anyway.  That to me does not stand up to Carter’s integrity test.  He is not keeping with his commitments to operate the restaurant in an honest manner.  I do not think that Paul is a person who can be completely trusted because even though he is not directly benefiting from the theft of the sales, he is still benefiting.  That is because by doing what he is doing, he is making the restaurant run better.   By taking better care of the employees, they are being better employees.  Which in turn is increasing customer service and therefore increasing revenues.  This comes back to making Paul look as if he is a better manager.  So yes, he is not directly benefiting from the taking of the money, but he is still being rewarded in some fashion because he is now being looked at for promotion. (Carter)