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Westchester Distributing is a beer distributor in
California. The owner has discovered that three of his employees have been
involved in a kickback scheme to entice a customer to buy 100 cases of Rising
Sun Beer. If the California Alcoholic Beverage Control Commission gets wind of
this, Westchester could effectively be out of business. Be prepared for an
energetic discussion in class. This case always generates a lot of interest.
Your assignment questions are as follows:
- Identify each of the participants in this little
drama and their role in it.
- Use Visio to work up a diagram of the dynamics of the
situation. Document the movement of cash, product and neon signs, the
incentives giving rise to the kickback scheme, and the falsification of
documentation involved.
- Develop a clear understanding of the industry and the
competitive environment. How does this industry "work?" How do the nature of
the industry and the competition impact the incentives which are used? What
are the dynamics of the relationships between suppliers [brewers] and
wholesalers like Westchester? How do these impact the dynamics of the
relationships between wholesalers and retailers like Wilson Moon?
- You are Vince Patton, founder of Westchester
Distributing. What do you do about the ABCC? Do you report the mess and risk
shutdown or do you "zip it" and hope no one turns you in?
- What sort of action would you take against each of
the participants? Actions could include any of the following [and perhaps
other options, depending on your creativity]:
- Fire all three on the spot.
- Fire one or two, depending on your perception of
culpability.
- Issue strong warnings and reprimands.
- Fine them and require reimbursement.
- Do nothing, effectively acknowledging that there
are deeper organizational issues involved which induced the employees to
act inappropriately.
- Still wearing your "Vince Patton hat," what do you do
to ensure this sort of nonsense does not happen again? Identify clearly and
specifically the controls that you would institute.
Questions 1-5 are for discussion only. Hand in your answer
to question 6 at the start of class. One page should be sufficient. Hard
copy only.
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