Case Study – A Romp Through Comp
What do you think of Floyd, the new bartender at FOI? What is Floyd going to do in this
situation? Do you think Floyd cares whether something is ethical or not? Can he be
taught to do the ethical thing? How? (Floyd can be taught to look at possible negative
consequences and make his decision based on the least painful option.) In this situation,
what do you think is the probability of Floyd getting caught? So, if he figures he won’t be
caught and doesn’t particularly care about ethics, what can management really do?
Management cannot always be watching Floyd to make sure he doesn’t steal.
Management is obviously aware that there is some problem because they have spotters
checking on workers. In this situation it looks like Floyd is clever in a devious sort of
way. He is conscious of the spotter’s presence.
The spotter in this situation is trying to find a wrongdoer. Professional managers should
not be in the business of trying to find wrongdoers, but should, instead, design systems of
operation that make it very difficult for employees to do wrong. Brainstorm some ideas
on how to keep Floyd, or any of the bartenders, from being able to steal from FOI.
I would like you to do an analysis of the decision of the bar manager, Mike Scales, to hire
spotters instead of designing and implementing controls to avoid employee theft
opportunities. Identify the Stakeholders, possible Consequences, and the Ethical
Principles violated by the decision. Use the following blank Ethical Analysis Form and
when you have completed your analysis you may compare it with the key at the end.
Ethics Analysis Form
Decision Option: Bar Manager fails to institute bartender theft controls and,
instead, hires spotters to find thieves.
Stakeholders
Principles
Consequences
This analysis makes it obvious that it is good and ethical management to design and
implement controls in advance to keep employees from cheating or stealing. Also, careful
selection of employees is essential. Floyd may not have been a good hire. Mike Scales
may not have the management skills to be able to design and implement the necessary
controls. He may need upper management’s help.
Conclusion
Many cost control issues are really human resources issues. Selecting appropriate
employees who are not thieves, training and supervising our employees not to steal or
waste product or time, and having controls in place that reduce the temptation to steal to
begin with, are human resource management tasks that make cost control possible.
Most of you have enough job experience to know the difference between good and bad
management. We prefer managers who know what they are doing and do it the right way.
We prefer managers who follow the rules and who are able to get all the employees
following the rules too. We prefer feeling pride in our work and in the place we work.
We prefer feeling good about what we do and the way we spend our time on the job.
Ethical controls, that is, controls that are Fair and implemented with Concern and Respect
for Others, combined with professional (ethical) supervision, increase the likelihood of
our management success.
Ethics Analysis Form
A Romp Through Comp
Decision Option: Bar Manager fails to institute bartender theft controls and,
instead, hires spotters to find thieves.
Stakeholders
Principles
Consequences
KEY – Ethics Analysis Form
A Romp Through Comp
Decision Option: Bar Manager fails to institute bartender theft controls and,
instead, hires spotters to find thieves.
Stakeholders
Principles
Consequences
Mike Scales,
Fairness
 If a spotter witnesses a bartender
Bar Manager
Concern & Respect
stealing, and the bartender is
(Decision
for others
subsequently fired, other bartenders
Maker)
Commitment to
will be more careful in the future to
Excellence
avoid getting caught. Theft won’t
Leadership
necessarily end, but it will occur less
Reputation and
often and be more difficult to spot.
Morale
 If it is easy for bartenders to steal, they
Accountability
might not think about the consequences
of getting caught. They will feel free to
do as they please.
 The environment bartenders work in
may be less respectful as spotters are
camped out at the bar, watching for
thievery.
 Theft and the hiring of spotters increase
costs, which reduces profits. Mike is
accountable for the profitability of his
department and his position is at stake.
 Employees who steal have little respect
for the managers who allow it to
happen.
 Employees who don’t steal have little
respect for the managers who allow
other employees to steal.
 Employees may be less cooperative,
morale may fall, and turnover may
increase.
Floyd
 If caught, Floyd will be fired. He will
not have a good reference.
 If not caught, Floyd will continue to
steal and may eventually be caught and
terminated.
 Floyd has little respect for management
or spotters. As he is allowed to
continue stealing, he will have less
respect.
Other
 If they see Floyd getting away with it,
Bartenders
despite the presence of spotters, some
bartenders may also be encouraged to
steal.
 Other bartenders may not like it that
Floyd is stealing, but they may be

Heidi Bell, Asst.
G.M. & Mike’s
Supervisor



FOI


uncomfortable about informing on him.
The working environment would be
spoiled for them.
Employees lose respect for managers
who don’t do their jobs properly. They
can be less satisfied and less loyal.
If costs stay high, Mike’s work could
come under his supervisor’s scrutiny.
He could lose the confidence of upper
management. He could even lose his
job.
On-going theft that is not taken care of
puts Mike’s job in jeopardy.
Mike was promoted and may not have
the expertise to put proper controls in
place. His boss, Heidi, is responsible
for his work and may need to help him.
The hiring of spotters increases
operating costs.
Internal checks and balances do not
increase operating costs.