Lucas B. Tagarda
Mgt. Case 1 This case is compelling us students to understand the business, fitness-training and because there is a real problem to discuss. A trusted employee was both stealing cash and, by not recording all sales, diverting some revenues to herself.

This case is a good discussion that helps us students think about both the records needed to run the business and the challenges managers face in making sure the information put into the records is recorded accurately like for example the challenges faced in maintaining an effective internal control system. I have some talk with my mother and her friends with some small businesses and they do told me that a common problem faced in many small businesses lack of overlapping controls, or in this case, they somehow call separation of duties.

She just trust Kate Hoffman so much that she let her take multiple tasks such as marketing, facility up-keeping, scheduling of appointments and record keeping. Kate was paid a salary plus a commission based on gross revenues just as other instructors. Kate might have thought that she did more work than other instructors and then she have to deserve more commission. And when her expectation was not met, she lacked the motivation to handle multiple tasks and turned to an unethical way like stealing money from unrecorded revenue.

If a new manager is hired, Kate can be released from administrative work and concentrate on her instructor job. This will avoid further money loss, and you can still keep the friendship between Kate and The manager is the only one that is responsible for appointment scheduling, record keeping and reports directly to you. Instructors may facilitate in marketing and facility up-keeping.

This is a better idea to just organize things and focus more on the business, Kate as an instructor and then Rose