Case Study Sunshine Fashion: Fraud, Theft and Misbehavior among Employees
Mujezinovic Alma
Professor P. McMickle
BSAD 319
Sunshine Fashion: Fraud, Theft and Misbehavior among Employees
1. What were the root causes of the staff´s misbehavior?
Sunshine Fashion was a Sino-Japanese venture, whose operations grown very quickly, from 1993, the year of establishment until 2008, when the company became the industry leader in the production of cashmere sweaters, and a high-end fashion brand in its domestic market. However, in 2008, company had faced serious fraud and misbehavior among its employees, causing the loss of more than 5% of total domestic sales estimated at between Rmb 9.3 million and Rmb 10.5 million. By 2010, Sunshine operated three factories in Shenzhen, Shanghai and Taiyuan province, with more than 200 sales counters in department stores and more than 1000 employees throughout the country. Sunshine's retail operations were monitored and managed by 14 branch offices, making it difficult to establish and sustain an effective control system of the company. Also, Sunshine had franchised some of its retail points outside of the major cities. Although company remained cautious about it franchising practice, difficulties in operational and brand control still existed. Theft and fraudulent behavior of employees could be a reflection of ineffective management system that is unable to establish proper control system that could prevent such misbehavior. Also, lack of engagement and motivation among employees can also be seen as a leading force for the ethical misconduct. Engaged employees reflect willingness to stay within the company, and go beyond their basic duties and responsibilities in order to achieve organizational objectives. Engaged employees not only contribute to the company trust and internal success, but also, as some research show to the annual rise of income and sales and overall revenues and profits of the organization. (DuBrin). Sunshine uses financial incentives and bonuses as a source of motivation, which is a natural
Professor P. McMickle
BSAD 319
Sunshine Fashion: Fraud, Theft and Misbehavior among Employees
1. What were the root causes of the staff´s misbehavior?
Sunshine Fashion was a Sino-Japanese venture, whose operations grown very quickly, from 1993, the year of establishment until 2008, when the company became the industry leader in the production of cashmere sweaters, and a high-end fashion brand in its domestic market. However, in 2008, company had faced serious fraud and misbehavior among its employees, causing the loss of more than 5% of total domestic sales estimated at between Rmb 9.3 million and Rmb 10.5 million. By 2010, Sunshine operated three factories in Shenzhen, Shanghai and Taiyuan province, with more than 200 sales counters in department stores and more than 1000 employees throughout the country. Sunshine's retail operations were monitored and managed by 14 branch offices, making it difficult to establish and sustain an effective control system of the company. Also, Sunshine had franchised some of its retail points outside of the major cities. Although company remained cautious about it franchising practice, difficulties in operational and brand control still existed. Theft and fraudulent behavior of employees could be a reflection of ineffective management system that is unable to establish proper control system that could prevent such misbehavior. Also, lack of engagement and motivation among employees can also be seen as a leading force for the ethical misconduct. Engaged employees reflect willingness to stay within the company, and go beyond their basic duties and responsibilities in order to achieve organizational objectives. Engaged employees not only contribute to the company trust and internal success, but also, as some research show to the annual rise of income and sales and overall revenues and profits of the organization. (DuBrin). Sunshine uses financial incentives and bonuses as a source of motivation, which is a natural
Cited: Consulting, Spero. Spero Consulting. 2008. Web. 6 November 2014. DuBrin, Ander J. Management Essentials, International Edition. Cengage Learning, 2011. O 'Conor, Naele. Snshine Fashion: Fraud Theft and Misbehaviour Among Employees. Hong Kong, 2012. Document.