Cleveland Custom Cabinets Case Summary

t is a difficult decision that Marcus Sims, the accounting manager of Cleveland Custom Cabinets, has to make. He is not only being questioned to partake in unethical actions – he is being influenced guilt from the owner of the company, James Leroy. The company overall has 155 employees, 125 of them being custom cabinet-makers and installers, and the other 30 being administrative workers. Leroy is one of many stakeholders in this case. His interests are focused on growing and expanding the company’s profits for growth, and it is shown that he will take unethical measures to ensure his goals are met. Another stakeholder is Sims, who has the responsibility of ensuring that the numbers of the company are accurate for internal and external purposes,
Additionally, the Board of Directors has interest in doing what is best for the company, typically in an ethical manner. However, with Leroy as the head of it, with his intense focus on achieving goals regardless of legality, the Board is compromised. As a result, the banks that would approve bank loan applications to assist in the growth of the company are also stakeholders that rely on the data that is given to them regarding their income. Not only could the bank that approves a fraudulent loan be affected, but the entire company could be viewed as participating in unethical practices and deter other financial institutions from approving loans down the road. Another external stakeholder are the external auditors, who are seeking to find material misstatements, but could be partially liable because of the intent to deceive caused by Leroy’s unethical
The core of this situation exhibits a Gray Area dilemma, as Leroy indeed does have a noble goal – to obtain the working capital loan to assist in the growth of the company, which positively affects all employees. However, the means he is utilizing to achieve his goal reveal an unethical person does not reflect virtuous character. The aspects of trustworthiness, respect, fairness, and caring are not displayed by Leroy. He is obviously aware of the fraud he plans to commit, which compromises his honesty and integrity. But, in many regards, this is more to do with the lack of empathy and kindness that Leroy has upon Sims. Essentially, he is bossing Sims to commit a fraudulent action, and takes advantage of his position as owner of the company as leverage to influence his decision. A lack of respect towards other employees, lack of fairness in regards to Sims having to creatively hide the fraud, and a lack of empathetic caring towards Sims indicates Leroy’s