Case Study: The Expenditure Approval Process

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Decision Case 2-5. The Expenditure Approval Process
Case Summary Roberto is the plant superintendent of a small manufacturing company that is owned by a large corporation. The corporation has a policy that any expenditure over $1,000 must be approved by the chief financial officer in the corporate headquarters. The approval process takes a minimum of three weeks. Roberto would like to order a new labeling machine that is expected to reduce costs and pay for itself in six months. The machine costs $2,200, but Roberto can buy the sales rep’s demo for $1,800. Roberto has asked the sales rep to send two separate bills for $900 each.
Case Questions
What would you do if you were the sales rep? As the sales rep, my job is to …show more content…

There is an approval process and certain amount that can be expensed for a reason. Leaders, managers, and employees need to understand what is happening in their company from a financial perspective and who can use that information to work and manage more effectively (Berman & Knight, 2013, p.17). If Roberto as an employee understood the company’s position then he may have been able to look for a new label maker under $1000 and get the expense approved quickly. If Roberto submits a request above $1000 the CFO will have to look at more financial data and ask questions to Roberto before he could make a …show more content…

This is not an ethical thing to do when the organization has a policy that should be followed. Decision making is a big part of what we do in business and our personal lives and we must keep ethics and our own morals in mind when making decisions. Having the right knowledge and foundation of decision making is important, there is a good path we can follow called “Making Ethical Decisions: A 7 Step path”. The 7 steps are: Stop and think, clarify goals, determine facts, develop options, consider consequences, choose, and monitor and modify (Making Ethical Decisions, 2002). I think by Roberto’s actions and these 7 steps Roberto could have done things differently to get the outcome he

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