1. Identify the issues Sophie has to resolve.
2. Discuss the alternatives for Sophie.
3. What should Sophie do if company policy appears to conflict with the firm's corporate culture?
***AN ETHICAL DILEMMA***
Sophie just completed a sales training course with one of the firm's most productive sales representatives, Emma. At the end of the first week, Sophie and Emma sat In a motel room filling out their expense vouchers for the week. Sophie casually remarked to Emma that the training course stressed the importance of accurately filling out expense vouchers. Emma replied, "I'm glad you brought that up, Sophie. The company expense vouchers don't list the categories we need. I tried many times to explain to the accountants that there are more expenses than they have boxes for. The biggest complaint we, the salespeople, have is that there is no place to enter expenses for tipping waitresses, waiters, cab drivers, bell hops, airport baggage handlers, and the like. Even the government assumes tipping and taxes them as if they were getting an 18 percent tip. That's how service people actually survive on the lousy pay they get from their bosses. I tell you, it is embarrassing not to tip. One time I was at the airport and the skycap took my bags from me so I didn't have the hassle of checking them. He did all the paper work and after he was through, I said thank you. He looked at me in disbelief because he knew I was in sales. It took me a week to get that bag back." "After that incident I went to the accounting department, and every week for five months I told them they needed to change the forms. I showed them the approximate amount the average salesperson pays in tips per week. Some of them were shocked at the amount. But would they change it or at least talk to the supervisor? No! So I went directly to him, and do you know what he said to me?" No, what?" asked Sophie. "He told me that this is the way it has always been done, and it would stay that way. He also told me if I tried to go above him on this, I'd be looking for another job. I can't chance that now, especially in this economy. Then he had the nerve to tell me that salespeople are paid too much, and that's why we could eat the added expenses. We're the only ones who actually generate revenue and he tells me that I'm overpaid!" "So what did you do?" inquired Sophie. "I do what my supervisor told me years ago. I pad my account each week. For me, I tip 20 percent, so I make sure I write down when I tip and add that to my overall expense report." But that goes against company policy. Besides, how do you do it?" asked Sophie. "It's easy. Every cab driver will give you blank receipts for cab fares. I usually put the added expenses there. We all do it," said Emma. "As long as everyone cooperates, the Vice President of Sales doesn't question the expense vouchers. I imagine she even did it when she was a lowly salesperson." "What if people don't go along with this arrangement?" asked Sophie. "In the past, we have had some who reported It like corporate wants us to. I remember there was a person who didn't report the same amounts as the co-worker traveling with her. Several months went by and the accountants came in, and she and all the salespeople that traveled together were investigated. After several months the one who ratted out the others was fired or quit, I can't remember. I do know she never worked in our industry again. Things like that get around. It's a small world for good salespeople, and everyone knows everyone." "What happened to the other salespeople who were investigated?" Sophie asked. "There were a lot of memos and even a 30-minute video as to the proper way to record expenses. All of them had conversations with the vice president, but no one was fired." "No one was fired even though it went against policy?" Sophie asked Emma. "At the time, my conversation with the VP went basically this way. She told me that corporate was nof going to change the forms, and she acknowledged it was not fair or equitable to the salespeople. She hated the head accountant because he didn't want to accept the reality of a salesperson's life in the field. That was it. I left the office and as I walked past the Troll's office—that's what we call the head accountant—he just smiled at me." This was Sophie's first real job out of school and Emma was her mentor. What should Sophie report on her expense report?
1. Why should Lael get involved in reporting if she has not experienced any of the allegations the other employees are making?
2. What are some of the characteristics of Best East's ethical culture that would create the current dilemma for Lael?
3. What should Lael do to resolve her concerns?
***Resolving Ethical Business Challenges***
Lael was just hired by Best East Motels into their man-ager training program and was excited about the potential benefits after her graduation from Florida State University. Working part-time and going to school full-time was the norm for her, but the Best East job replaced her two part-time jobs. With this new job, she would be the one to assign work times. Her luck continued when she met her mentor Nikhil, who was the son of the owner. Best East Motels was a franchise motel chain in the United States. Owners bought into the chain with a $500,000 franchise fee and paid for the construction of the motel. In return for the fee, Best East gave each owner a comprehensive package of marketing, management, accounting, and financial materials to boost motel success rates to over 90 percent. In addition, Best East assisted each owner with groups of people that trained staff for every new job, from housekeeping to accounting. The new-hire training course for each type of employee was developed and based on the best practices within the industry. This particular motel had been in business for 10 years and was seen as successful.
As Lael went through the manager training program, everything she heard was great. It sounded like Best East was a career path she would want to pursue long-term. Six months into her job, however, Lael started to hear strange rumors. For example, on the night shift she found there was heavy employee turnover and most were females. Lael began to investigate by scheduling herself onto several night shifts. One night, as she chat-ted with one of the front desk employees, she discovered the girl planned on quitting. She was seventeen and worked at this Best East motel for a year. "Why are you leaving?" asked Lael.
Her reply startled Lael. "I don't want trouble, just my last paycheck, a good letter of recommendation, and that's it." As Lael pressed her for more information, the 17-year-old opened up. She spoke about Nikhil talking suggestively about her to other employees and how he made suggestive physical gestures when she was around. She told Lael about other female employees treated similarly, and this always occurred during night shifts when Nlichil was on duty. Digging a little deeper, Lael spoke to several former employees. Most were fairly young female employees. They told her essentially the same thing. For example, Nikhil would routinely make suggestive comments to female employees. In one incident under Nilchils watch, some male employees flirted with female employees, including undocumented workers. Nikhil reportedly sat there with a smile. They also told her Nikhil allowed customers at the motel to offer their room keys to female employees.
After a few weeks, Lael heard the same story from younger female employees and even some of the maids. Their responses to these situations were similar. They ranged from "Nikhil told me if I was older he would ask me out" to "I don't want to make a big deal out of this because it might appear I'm a tattle tale." Another com-mon excuse for not reporting was that Nikhil assured them this was part of the motel business and was nor-mal. Most employees were afraid to report on the boss's son and put their jobs on the line. Lael reviewed the section of the franchise employee handbook. It clearly stated sexual harassment of any kind would not be tolerated and should be reported immediately to the proper manager. Lad could tell from the manual the allegations against Nikhil constituted sexual harassment. While the Best East Franchise Corporation had no ethics hotline, Lael thought this could be a legal issue.
She knew putting pressure on the female employees to report the behavior of the boss's son was problematic. Lael also felt that going to Nikhil personally about these allegations may not be a wise move. If the behavior was reported to the owner, it would become an official allegation and impact the motel's reputation and image in the community, and she would be responsible for it. The things these women were saying had not personally happened to her yet.