Principles of Management

I. Background
Mr. Alfaro Burgos, the vice president for sales of Dyners Corporation. It is a family firm that manufactures stainless steel and silver plated tableware. After some time, the inventory of the company showed a shortage. He discovered some mispacking of silver plated tableware in the warehouse of the corporation. He hired an industrial security firm to investigate the deprivation in the warehouse. It did not take long for the agent to discover the truth. Karlo Deles, the warehouse supervisor was the man behind the internal theft in the warehouse. He was shipping silver tableware to his friend but the shipping boxes were labeled and billed as stainless steel.

II. Analysis Report

a. Problem
Karlo Deles, the warehouse supervisor was pilfering silver tableware in favor for his friend. He was being dishonest to the company.

b. Objective
To analyze the problem properly, to know what to do with  the supervisor who do the stealing, consider the most fair and appropriate
decision and to solve the problem without stepping into anyone’s morale.

c. Areas of Consideration
Karlo Deles, the warehouse supervisor, 57 years old and too old to find another comfortable job. His salary is not enough to maintain his standard living, the reason why he pilfers. The employees that Mr. Deles handled disliked him. It is because he was a menacing bully to them. He was threatening them that’s why they are afraid to step forward. Mr. Burgos did not give importance to his senior employees. He has not giving them enough incentives. Employees in the warehouse are much aware in the pilferage of Mr. Deles. Mr. Deles admitted that he had been mispacking some cases as a favor to his friend who sent him and his family on a free holiday abroad each year.

d. Courses of Action

Prosecute Mr. Deles to set as an example to other employees. Give him a jail sentence as a consequence to his action.

Advantage
Other employees will be afraid to do the same thing as what Mr. Deles did. This will make the company trustworthy. Disadvantage
Prosecution will bring unwanted publicity to the company. And if this will fail the market may probably lose their trust to Dyners Corporation.

Get Mr. Deles to resign and take a very much reduced company pension, in exchange for an agreement not to prosecute or try to recover money for the stolen goods.

Advantage
Mr. Deles is 57 years old and he is not capable of finding another comfortable job. But since he worked for 23 years in the company he should be given atleast some pension. Disadvantage

Instead of punishing him to his bad actions, he was treated as an important employee. He steal materials that worth a lot of money and yet he will still receive pension.

Fire him but not prosecute him. Mr. Burgos should compute the difference between the real amount of the materials that has been shipped and the amount that the customer only paid for. Then he should talk to the customer and let him pay for the excess amount of money.

Advantage
This will serve as lesson to other employees that pilfering is not acceptable in the company. Disadvantage
The inventory may find it hard to compute because they don’t really know how much is the real amount of materials that has been stolen and shipped to the customer. And the possibility of the customer not to pay the excess amount may occur.

Mr. Burgos should give Karlo Deles a strong reprimand and keep him in the company. He will still work to Dyners Corporation but he will pay the sum of the money that was loss in the company by his future wages. But Mr. Deles should be closely watched.

Advantage
This will be another chance for Mr. Deles to learn his lesson and to correct his mistake. It is much better than to dismiss him because he may lose his source of income that he needs for his family. Disadvantage

If Mr. Burgos still let Mr. Deles stay, it would be an open invitation to other employees to follow suit. And there is possibility that Mr. Deles still continue his misdoings.

Let Mr. Deles stay and he will still be paid. But while he is still in the company he will train some employee that Mr. Burgos think are suited for the position of supervisor. If Mr. Burgos already knows whose employee deserves for promotion, he will demote Mr. Deles to lower position. And if he will not act properly he will be terminated.

Advantage
It is a safe move for the company because they will not get bad publicity; they will not undergo into many processes and may be the easiest way to get rid Mr. Deles. Mr. Deles will not lose his source of income unless he makes an unnecessary move against the company. Disadvantage

Mr. Deles may not teach all the tasks and responsibility of being a supervisor to his trainees. As he will consider himself as a big loss since he worked for so long in the company and will not let anyone take charge in his position. It will also take time for the trainees to learn all the tasks of a supervisor and in case they were promoted they still need to adjust themselves into new challenges.

Dismiss Mr. Deles without getting any pay back or pension from Dyners Corporation. It is the consequence for being dishonest in the company. His pension or pay back that should receive will be the payment for the big loss of the company due to his stealing.

Advantage
This will be a relief for the employees he handled because they totally disliked him. According to them, Mr. Deles a menacing bully. He was threatening them that’s why they are afraid to step forward. If they report Mr. Deles they may lose their job or be physically assaulted.

Disadvantage
His position as warehouse supervisor will be vacant. This may affect the performance of the people under his supervision because they don’t have a leader. And if their performance was affected it will reflect to the performance of the company. This may result to more business losses.

e. Recommendation
For us, the best decision would be, to get Mr. Deles resign and if he insists he will be fired instantly but he will be not prosecuted. The prosecution will only bring bad publicity. Dyners Corporation should not hope for recovering the amount of silvers that Mr. Deles and his friend stole. But even if he was fired he will still receive a company pension. It is for working for Dyners Corporation for 23 years. It is also taking consideration to his age since he is not capable of finding another comfortable job.

f. Plan of Action
Consider the proper way of firing the warehouse supervisor. Start talking to him first and convince him to resign. It should not make any unwanted publicity. Set an agreement on how the pension matter would be. How much, every when will he receive his pension and until when will he receive it. Hire a new warehouse supervisor. It should be from the company too wherein he/she already know how to run the business. He/she must be suitable for the position. He/she must be honest and trustworthy. Hire an industrial security to monitor and inspect every shipping box to ensure that there is no mispacking. It is to avoid the pilferage happen again. Hire an inventory control specialist or if the company already has, he/she should improve his work. Make sure that everything was recorded. Items are placed on its designated box. Track every record of shipping and always keep the invoices of shipped boxes. If he/she notices that something is wrong report it immediately to the management.

Dyners Corporation should give annual team-building, necessary incentives for all employees especially to all senior employees, bonus or raffles once a year and atleast yearly one-day-get-away to somewhere wherein they can forget all the stress from work and just enjoy. The company should conduct a meeting with all of the employees. They should warn all of them that if anyone tries to steal, have a plan of any misdoings or do anything against the company, they will not hesitate to give them a jail sentence and prosecute them. Dyners Corporation should now be more organize and specific in labeling, packing and shipping their products.

g. Potential Problem

Karlo Deles may not accept the agreement and make an unwanted publicity by bringing the case to the court. He can also make complaints against Dyners Corporation regarding his low wage. Also, if his position will be vacant, the company will encounter difficulty in finding a replacement to him.

h. Contingent Plan of Action

Before firing Mr. Deles, Dyners Corporation and Mr. Karlo Deles should signed an agreement wherein it states that in exchange of not prosecuting him and giving him a company pension, Mr. Deles should not make any unwanted publicity. If he does, the company will send him to jail and all the employees he handled will testify against him. The company can offer Mr. Deles to train an employee whom the company thinks that suits for the vacant position. He will be paid for training this employee. He should teach all the tasks and responsibilities of a supervisor. If he insists, there will be no way other than hiring an applicant that already has an experience as a supervisor or promoting an employee that the position is one step away from the supervisor. The manager can temporarily take charge the vacant position while looking for replacement.