Reference no: EM133031478

Making Ends Meet

When Dan was hired by the owner of a small bistro, the job sounded like a good deal. Along with his salary as manager, he would receive a 20% incentive pay bonus. Dan was good at inventory control and he worked well with people. He made sure that waste was kept to a minimum, and after the first year, he had received the bonus pay every single month. But the amount kept getting smaller as prices on little things began to increase. The import tax increased on the unique products the bistro bought from Caribbean suppliers. Even the cost of rice had risen. Dan convinced his owners to buy a proofing oven, and he began making his own bread and hamburger buns.

To the owner's satisfaction, the fresh quality of these productsbrought in new customers and increased sales. Then the value of the loonie began to rise against the U.S. dollar, fuel prices doubled, and the cost of food increased again.

For two months, Dan struggled to keep within the budget. His bonus pay disappeared. Finally, he made a decision. He chose three items listed on the menu: a 1 1/4-pound lobster that sold for $39, the 6-ounce hamburger that began at $8, and the 16-ounce sirloin steak that sold for $24. Dan adjusted these products thusly: the lobster went to a pound, the burger dropped to five ounces, and the sirloin dropped to fourteen ounces. He did not reflect these minor changes on the menu. As he expected, his bonus pay was restored and no one was the wiser!

1. What caused Dan's problems?

2. Which of the two solutions that Dan came up with is ethical? Why?

3. "No one was the wiser"-what emotions and thoughts might the owner have when he learns the truth? The customer?

4. If you were the owner, how would you handle this problem? What would be the positive and negative impacts the other staff might feel? The customers?