Jane is a new sales rep in a major small appliance manufacturer. She is placed under the guidance of the firm's most productive sales rep, Ann Green. Jane has a problem with the reporting of expenses. She feels that she should only report her actual expenses while Ann and the rest of the reps inflate their actual expenses. Ann's rule of thumb when it came to recording expenses was to inflate them by 25%. Her rationale was that the company owed them for their hard work and extra hours they put in. When Jane attempted to take the ethical approach and record actual expenses, Ann responded in an angry tone. She felt that her Job, as well as the jobs of the other reps, would be in jeopardy if Jane reported accurately. Ann was satisfied with the code that her and the other reps shared and they all agreed that the company did not really need that money because it was very profitable.
             The problem in this case is that Ann and the other reps are reporting costs unethically. They inflate expenses in order to create more income for themselves. The magnitude of this problem on a scale of 1-5 is a 5. This problem is very serious. The company is being charged for expenses that don't really exist and this will result in reduced profits and profitability. These unethical types of practices may lead to other types of more deviant behavior from the reps. If they feel like the company owes them, they may act out in other ways against the company and this will not be healthy. This problem is important and needs to be addressed before it escalates. This problem exists because the employs feel that the company owes them for long hours worked. The company may have contributed to this problem by overworking and underpaying their reps while they make large profits. They may also have allowed this to occur due to the fact that they allow their reps to record their own expenses using an honor system. This makes it hard to mon...