Sunshine Fashion Case Study

1357 Words6 Pages
Individual Case Report: Sunshine Fashion: Fraud, Theft and Misbehavior among Employees Aya Tofach 301149738 What are the root causes, individual and contextual, for the employee misbehavior at Sunshine? Misbehavior at Sunshine Fashion mainly consisted of fraud and theft by branch managers. The root causes of these misbehaviors can be split into two categories, individual and contextual: Individual: Branch managers used Sunshine stores to build personal relationships with department stores and to promote their own individuals brands. This behavior clearly demonstrated a lack of loyalty to the company. In addition, branch managers received a fixed monthly salary of between Rmb 3000 to Rmb 4000 [1]. Bonuses were distributed on a yearly basis but with a lack of transparency regarding how each amount was derived per employee. It can be reasonably assumed that the company’s compensation policy had an effect on managerial misbehavior [4]. A compensation structure that leaves managers and employees feeling unappreciated, may lead to low motivation or misbehavior as an extreme response [2]. Contextual: As mentioned before, rewards were distributed uniformly for branch managers and did not take into account location or standard of living of the particular branch/region. In addition, the “head” offices had no control over a significant amount of variables at the branch level. Issues such as local promotions, discounts and stock were decided by each branch separately. Inconsistent data was commonly entered manually into the ERP system when there was no existing auditing structure to unravel fraudulent practices. One major issue is the lack of leadership within the organizational structure. Branch managers do not have close relationships with their corporate superiors and performance evaluations were based on problematic criteria. Rather than setting personal
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