Vince Patton was shown a letter that on further investigation revealed that some of his salesmen illegally provided kickbacks and gifts to one of their customers then filed fraudulent expense reports to get back the kickback money spent. If the Alcohol Beverage control gets wind of this violation, they will revoke Westchester’s license for 45 days, which would close their doors. I believe the main factors that lead to this issue were the lack of a strong ethical culture at Westchester Distributing and not having good internal controls in place. In this paper I will discuss some of the ethical issues that are prevalent at Westchester, methods to improve the ethical design and provide suggestions on how Patton should deal with his employees Mario, …show more content…
Patton could poll other companies in the distribution industry to determine an average broken bottle rate and be able to compare to his company’s numbers to identify potential anomalies. Westchester can also accept broken bottles and return them to the warehouse before disposal so that based on the weight the numbers can be cross-checked. For the expense report the requirement of formal receipts needs to no longer be an unwritten rule but an enforceable one. There can also be random audits by independent CPAs who may even use data analysis techniques like Benford’s Law to identify irregularities in …show more content…
As a result employees feel engaged and committed to the company and want to protect the company from the risks associated with misconduct and lurking ethics issues. Westchester Distributing does have a “Standards of Conduct” that employees have to read and acknowledge by signature each year. However this is not enough to get buy-in. If you think of those agreement forms that companies ask you to acknowledge and accept before downloading their software, besides not reading the form in its entirety, will I really not accept the terms and conditions if I need/want to use this software? Likewise employees at Westchester Distributing would always acknowledge this form as it is needed to keep their job but this does not mean they buy-in to the message. Westchester needs to have some in-person training on their Standards of Conduct as well as training on the expectations from the Alcohol Beverage Control. Then these resources need to be readily available on the company website, for example, in case employees have questions when they find themselves in a sticky