Reference no: EM13742521

Case Study On Padding the Expense Account?

Principals:

Rick Bell-residence accounts manager in Midland for United Electric Company. Rick is 25 years old, is considered to have good potential as a manager, and was promoted to his present job one month ago.

Stan Holloway-district manager for United Electric in Midland. He is 33 years old and has been in his present job 21/2 years. His district, Midland, has strong political influence in the company, as the current president of United Electric was raised in Midland.
Stan is Rick's boss.

Chester "Chef' House-division manager for United. He is 61 years old and is located at company headquarters about 30 miles from Midland. He is Stan's boss and is also a close personal friend of the president of United.

At 7:45 AM on the 28th of March, Rick Bell was preparing to leave Stan Holloway's office after chatting with him for a few minutes about the week's activities.

Rick Oh, I almost forgot. As soon as I have my monthly expense voucher typed, I'll send it to you for signature so it can be forwarded to disbursing.

Stan: I'm glad you mentioned that. I had meant to talk to you about your voucher this month. I have about S100 worth of items I want you to include on your voucher. This month my voucher is really loaded, and I hate to submit an extremely high amount in light of the emphasis being placed on personal expense control. Since I have signature authority on your voucher, nobody will look at it, and when you get your check back you can give me the extra amount to cover my additional expenses. Here is an itemized list of expenses and dates incurred for inclusion.

Also, don't forget that Chet House is coming by today, and we are to go to lunch with him.

Rick Bell leaves Stan's office with the itemized list in his hand. During the morning, Rick gives much thought to Stan's request. At about 10 Am, Stan calls Rick on the intercom and informs him that he (Stan) won't be able to go to lunch with them (Rick and Chet) that day because the local congressman is making an unscheduled stop in Midland to confer with some selected business leaders on some local issues that will be dominant in the upcoming fall election. He asks Rick to take Chet out to lunch and give him his regrets and to tell Chet that he (Stan) will see them after lunch around 2 PM. When Chet arrives, he and Rick leave for lunch and during the meal, the follow¬ing conversation ensues:

tack: Mr. House, wnat would you ao it you were ever approacnea to include expenses on your expense voucher that were not yours?
Chet: Well son, that's a hard thing to theorize on. I guess the best approach would be to look at the consequences for different courses of action. If you did it and got caught in the yearly audit (a slim but possible chance), you could be reprimanded or even fired if the violation were flagrant enough. Of course, if you didn't get caught, you would be home free unless you were repeatedly asked to do it. And if you refuse to do it and the person asking you happens to be your boss, funny things sometimes begin to happen. People get labeled as being uncooperative and nobody wants to be thought of as being uncooperative

So I guess that every man at some time has to make a decision that determines his survival among the fittest. This situation could be one of them.

Rick and Chet finished their meal in relative silence and went back to the office where they met Stan for their conference. After the conference, Rick went back to his office and gave some thought to the events of the day. That evening after work Rick went back to Stan's office with the results of his decision.

1. What would you have done if you were Rick?

2. Do you agree with Mr. House's response to Rick?