Wk 1 Accounting

The negative managerial scenario that the regional manager, Zoya Arbiser, is sensing is that the store manager is focused on his own personal gains. The store manager is very aware that the amount of his income will be based on the direct contribution margin of his store; therefore he has been cutting direct costs. Direct contribution margin is revenue minus its direct cost (Schneider, 2012). Zoya Arbiser noticed that Store 9’s personnel training expenses are very minimum compared to other stores and they have stopped participating in many community events. These actions clearly show that the store manager is cutting expenses that he believes they can do without, and in return, put more money in his pocket.

It is possible that the manager of Store 9 is an exceptional manager because he has a proven track record. He has managed other profitable stores including Store 6, which has had a large drop in profits after his departure. His actions in this situation could possibly be saving the company more money than they realize.

The ethical implication of this scenario is that the manager of Store 9 is not putting the company or his employees first. By reducing the personnel training expense and not participating in the community events, it clearly shows that he is not interested in the company’s overall gain. Zoya Arbiser’s ethical responsibility is to approach the store manager and discuss his actions. She will need to let him know that saving the company money is great, but the way that he is doing it is hurting them.