Reference no: EM131124532

Bob Schein, vice president of human resources at Glenfair Electronics, sat at his desk thinking about the meeting he had just had with Anwar Patel, an accountant. He had listened intently to Patel describe what had transpired in the finance department during the last few weeks. Patel joined Glenfair after completing his degree in accounting five years ago. For the past three years, he had been preparing Glenfair’s sales revenue reports. As a listed company, Glenfair was required by the Securities and Exchange Commission to issue public sales and profit forecasts. Glenfair Electronics had over 10,000 employees and a reputation for producing high-quality electronic components used in a number of manufacturing applications. The company had begun to experience a slowdown in product demand, and their share price had declined as well in the last year and a half. Patel had told Schein that he had been instructed to use a different and more aggressive accounting method for forecasting and calculating projected sales revenue for the coming year. He believed that such an approach could mislead shareholders about Glenfair’s likely future sales performance. The previous chief financial officer (CFO) had taken a rather conservative approach and did not stretch the boundaries of acceptable practices. Since the beginning of the year, however, Patel was working under a new CFO, John Beatty. Beatty had joined Glenfair earlier in the year after not obtaining a promotion to CFO at his previous company. Everyone perceived him to be smart and ambitious and it was clear that he was determined to make his mark at Glenfair. When Patel pointed out that the proposed accounting methods were very different from Glenfair’s traditional practices for reporting sales revenue, he told Schein that Beatty had said, “Well, I am the new CFO, and I have a different view and approach.” However, it was his next remark that disturbed Patel the most. According to Patel, Beatty went on to say, “Sales should turn around next quarter, and we are justified in reporting higher expected sales revenue in the coming months. Besides, Anwar, don’t you want your Glenfair stock to do well?” Projected higher sales revenue could indeed burnish Glenfair’s earnings outlook and probably help its stock price. When Patel persisted in questioning the accounting methods, Beatty allegedly told him to do his job as instructed. Since that conversation, Patel felt that Beatty had become hostile toward him, and they no longer had a friendly relationship. Despite his fears, Patel felt he had to come to Schein for advice. Schein could see that Patel was worried about Beatty finding out about their meeting. Schein was disturbed by what he had heard from Patel and sat at his desk thinking about what he should do as vice president of human resources.

Questions

1. If you were Schein, what would you do, if anything? Explain.

2. What should Schein do about Patel’s claim that Beatty has become hostile toward him?

3. What rights and protections do whistle-blowers have in the workplace today?