Reference no: EM133267686

Question: An internal audit revealed several problems at Sarnia Eco-Retailers. Alva, the founder and manager of Sarnia Eco-Retailers, was called into a meeting to discuss the issues, and to recommend the best course of action.

Internal auditors were working hard for the past month, auditing Sarnia Eco-Retailers main office and branches. The auditors did not look for financials only, they also did a Corporate Social Responsibility Audit. After they finished the audit, they asked to meet Alva, in order to discuss the current issues at Sarnia Eco-Retailers.

Alva gladly met the auditors at his office. During the meeting the auditors highlighted several disturbing behaviors, which are related to a specific employee, and to Corporate Social Responsibility.

To begin with, one of Alva's employees was engaging in unethical practices. She works as the purchasing manager with one of Alva's stores. When the employee prospects for new products, or new relationships with suppliers, she does not always choose the supplier with the lowest price. This behavior was strange, so the auditors obtained more information to further analyze this issue. The employee calls the suppliers and meets with them, during the meeting she asks the suppliers to agree to his terms, in exchange for better pricing on some of Sarnia Eco-Retailers products. Usually she will offer discount cards to the supplier's product manager. But sometimes, she invites the product manager to an expensive restaurant, where they dine together. After these meetings usually the product manager will offer Alva's employee, special deals for his personal purchases only, while raising the price for the products which are supplied to Sarnia Eco-Retailers.
The auditors also discussed a recent incident at one of the company's branches. The branch which is located in Barrie, accidentally polluted the local lake. The local community was displeased by the branch's actions, and asked the branch manager to clean-up the mess which was created by Sarnia Eco-Retailers. But the local manager did not admit any wrong doing, she says, it wasn't the company's fault. When the local stakeholders visited him, she explained that it was due to an action of an ex- employee, whom was fired. The local manager also highlighted that the company will do nothing to clean up the pollution, since it is the former employee responsibility to do so. Stakeholders were not satisfied by these answers and promised litigation against the company. The auditors cited, it's highly unlikely that the stakeholders will win the case in court, but it could damage the corporate image in the community.

Alva thanked the auditors, and promised to get back to them once she decides, what to do. Alva is willing to analyze the situation from an ethical stand point and then take a course of action, which will lead to the best results

1% analyze the purchasing manager case from a business ethics stand point.
1% recommend the best course of action which should be taken in regard to the purchasing manager behavior.
1% analyze the branch manager behavior from an ethical, and Corporate Social Responsibility stand points.
2% recommend the best course of action, in regard to the Barrie branch, and the branch manager.

Note: you can make any assumptions that are deemed necessary for this case. Clearly state your assumptions in your submissions. Summarize your findings in a two page word document.