Glenda Good and Danny Rock are department managers in the house wares and shoe departments respectively for Litwins a large department store. Danny has observed Glenda taking inventory from her own department home apparently without paying for it. He hesitates confronting Glenda because he is due to be promoted and needs Glanda's recommendation. He also does not want to notify the company management directly because he doesn't want an ethics investigation on his record believing that it will give him a "goody-goody" image. This week Glenda tried on several pairs of expensive running shoes in his department before finding a pair that suited her. She did not however buy them. That very pair was missing this morning.
Litwins recently replaced its old periodic inventory system with a perpetual inventory system using scanners and bar codes. In addition the annual inventory is to be replaced by a monthly inventory conducted by an independent firm. On hearing the news of the changes Danny relaxes. "The system will catch Glenda now" he says to himself.
Required:
1. Is Danny's attitude justified? Why or why not?
2. What if any action should Danny take now?

Question

Miles Latimer · Accepted Answer

Final Answer :

1. Danny's attitude is not justified. The system will only be able to detect that merchandise is missing not to determine who took it.
2. Danny should notify his superiors at once. He has knowledge of what may be criminal acts and by concealing them he is very close to becoming a party to the acts. Danny's apparent fear of not being promotable because of a "goody-goody" image seems unjustified. It would seem more likely that Danny's refusal to accept unethical (and illegal) acts by others would make him a more valuable manager. He may even be jeopardizing his career with Litwins if someone else reports Glenda's actions. The resulting investigation may implicate Danny because of his failure to notify the proper authorities in a timely manner.

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