Please read Case Incident, then,
using The Short Essay Format, answer the 3 questions that follow the incident. Please use references where applicable. 1/2 page for each question.
Mickey Mouse Controls
Jean: Hey, John, I could sure use some help. We regional supervisors are caught in
the middle. What do you do about all this red tape were having to put up
with? The accounting department is all bothered about the way people are
padding their expenses and about the cost of luncheons and long-distance
calls. You knowtheir answer is nothing but more red tape.
John: Well, Jean, I dont know. Im feeling the heat too. Upper management wants us
to maintain our contacts with our brokers and try to get the money out in
loans. So we push the district supervisors to see our best contacts or at least
call them frequently. Yet lately, Ive been having a heck of a time getting my
people reimbursed for their expenses. Now the accounting department is
kicking because we spend a few bucks taking someone to lunch or making a
few long-distance calls.
Jean: I really dont know what to do, John. Ill admit that some of my people tend
to charge the company for expenses that are for their personal entertainment.
But how can I tell whether theyre buttering up a broker or just living it up on
the company? The accounting department must have some receipts and
records to support expenses. Yet I think that getting a receipt from a parking
lot attendant is carrying this control stuff too far. As a matter of fact, the
other day, I caught a taxi at the airport and failed to get a receiptIll bet I
have a hard time getting that money from the company even if I sign a
notarized affidavit.
John: Well, the way I handle those things is to charge the company more for tips than
I actually giveand you know they dont require receipts for tips. I just dont
know how to decide whether those reimbursement receipts that I sign for my
people are legitimate. If I call people up and ask about some items on a
reimbursement request, they act as though Im making a charge of grand
larceny. So far, Ive decided to sign whatever requests they turn in and leave the
accounting department to scream if it wants to. The trouble is that I dont have
any guidelines as to what is reasonable.
Jean: Yeah, but I dont want to ask questions about that because it would just
result in more controls! It isnt up to me to be a policeman for the company.
The accounting department sits back looking at all those figuresit should
watch expenses. I ran into someone from the department the other day on
what she called an internal audit trip, and she told me that they arent in a
position to say whether a $40 lunch at a restaurant is necessary to sell a loan.
She said that the charge was made by one of my people and that I should
check it out! Am I a regional production person or am I an accountant? Ive
got enough to do meeting my regional quota with my five district salespeople.
I cant go snooping around to find out whether theyre taking advantage of
the company. They may get the idea that I dont trust them, and Ive always
heard that good business depends on trust. Besides, our department makes
the company more money than any other one. Why shouldnt we be allowed
to spend a little of it?
John: Well, I say that the brass is getting hot about a relatively small problem. A
little fudging on an expense account isnt going to break the company. I
learned the other day that the accounting department doesnt require any
receipts from the securities department people. They just give them a per
diem for travel and let them spend it however they want to, just so long as
they dont go over the allotted amount for the days that theyre on trips.
Jean: Now that sounds like a good idea. Why cant we do that? It sure would make
my life easier. I dont want to get a guilt complex about signing reimbursement
requests that may look a little out of line. Why should I call an employee on
the carpet for some small expense that may be the reason we got the deal?
Performance is our job, so why cant the company leave us alone? They should
let us decide what it takes to make a deal. If we dont produce the loans, we
should catch flak about something thats importantnot about these
trifling details.
John: Jean, Ive got to run now. But honestly, if I were you, I wouldnt worry about
these Mickey Mouse controls. Im just going to do my job and fill in the form
in order to stay out of trouble on the details. Its not worth getting upset
about.
Questions
1. Has the company imposed overly restrictive controls? Explain why or why not.
2. Do you think the company has a good conception of control tolerances? Why or why
not?
3. What should Jean do?
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