I wanted to get your thoughts about the recent allegations of conspiracy and kickbacks by one of our former managers. He is accused of over-charging Best Buy approximately $31,000,000 in parts for personal gain. As unfortunate as the situations is, it gives us a forum to shape the ethical business culture at Best Buy. Click the link below to read the whole story from the Minneapolis StarTribune and then feel free to give me your thoughts. I look forward to hearing from you.
Here is a link to the story: http://www.startribune.com/business/36205909.html
What are the ethical implications for Best Buy in this story?
Are there things in our culture that led to this situation or made it possible?
Do you think we are at risk for this happening elsewhere?
@Kat Fortunately, at this time we believe this scheme had little or no impact on our customers. The fraudulent scheme dealt with parts used by service technicians and others in repair and service; while Best Buy was cheated by this vendor and employee, the fraudulent prices were not charged directly to customers who needed replacement parts as the price for such parts was billed separately by a third party. We will continue to do everything we can to ensure that our customers are not affected by the fraud that has been perpetrated against us and our investigation is ongoing.
I think that this is a pretty clear cut case of fraud and someone using their position for financial gain. I do, however, question the availability of favors, tickets, entertainment, etc. that are common at certain levels in alomst every company (including BBY), but would be considered inappropriate or even terminable offenses under the category of conflicts of interest if taken advantage of by someone in a lower capacity. I think that consistency and leadership by example is absolutely critical. We cannot afford to have a “do as I say, but not as I do,” type of leadership.
We need to get back to the basics. This company has values that we are all suppose to know, live and teach. I don’t think that we as leaders spend much time modeling these. The company is focused on driving results but there has to be ethics and values behind them or cheating & stealing will continue. When you build a team on our values and ethics you will win? When was the last time anyone was given recognition for standing up for what is right? The culture has to be rebuild and quickly.
I think this story goes way beyond what most of the employees in our company (field) see and have access to. This involves a dishonest employee working with a dishonest vendor on a massive scale. What surprises me is that there had to have been a lack of accountability or oversight by someone who managed this employee. The break downs had to be multiple or others internally were involved. The signs had to have been visible along the way and either were dismissed (we trust him) or were ignored all together. In multiple points someone failed to question or challenge what was going on. A culture of complacency existed and contributed to fraud. It makes me wonder how many job those 31 million would have paid for in our company.
I guess I’m a little surprised that this went on for as long as it did without being detected. There are systems in place in the Field to catch theft and fraud (some effective and some not) but we’re talking $31,000,000 here????
As for the ethics of this….I agree with Chris in that there’s no question, no grey at all.
My issue with this is that yes, Best Buy was overcharged on the parts bids. But did we unknowingly turn around and charge PSP/MFG for these part prices? If so that could be a huge problem that goes far beyond the ethics questions with one particular employee.
Well, there isn’t much grey area on this one… If he did it, there really is no way to argue that it was ethical. I guess what I would want to know is: where did it start and did this “relationship” begin with simple gifts and small kickbacks and turn into this much larger scheme? If so, it would imply a “slippery slope” kind of danger to anything moderately inappropriate when it comes to gift giving/receiving.