Is it ethical to tell lies of the sort?

Fancy Ropa operates a national chain of retail clothing stores. The company’s main corporate offices are in Saint Louis, with warehouses in Houston and Miami. It also has offices in the Republic of Panama and Los Angeles, which coordinate the company’s import operations.

Fancy Ropa runs a central accounting system from its Houston offices. The retail stores throughout the United States transmit daily sales and inventory data to Houston via ANSI X.12 software installed at all sites. Payroll for all company employees is outsourced to Automatic Data Processing, Inc (ADP). Human resource management is handled through the Miami office using a software package called MyHRC Manager. Some human resource data is stored both in the ADP system and in the MyHRC.

Fancy Ropa’s warehouse and distribution manager tracks the movement of all incoming shipments using various spreadsheets. The two main warehouses maintain their own inventory records in local databases.

At the end of every week, all stores relay expense reports via e-mail to the central office. Payments for local-store and corporate expenses are made by the treasurer using the electronic bill-pay system attached to the company’s bank account in Houston.

Karen Falda, Fancy Ropa’s CEO, recently toured all the company’s offices and warehouses, and also many of its retail stores. Her trip was precipitated by her gut feeling that things weren’t going well for the company. Many regional store managers were complaining of long delays in receiving new shipments of clothes and about receiving identical items that were being sold for a lot less at Walmart stores.

Karen Falda’s visits to the warehouses revealed large storage areas with thousands of unmarked crates and boxes. The warehouse managers couldn’t explain what type of clothing was in the boxes and crates or how long the boxes and crates had been sitting in their present locations. But it looked like they had been there for quite some time, as they were covered in dust.

Karen met with Ken Marsten, Fancy Ropa’s controller and chief technology officer, regarding the problem. “We just can’t compete given our current software applications architecture,” he said. She agreed with him, but neither had any ideas for improving the situation.

Questions/Issues to address in post:

• Explain how Fancy Ropa might have gotten in its present situation.
• Explain Fancy Ropa’s software problem.
• Make a recommendation for a solution to the software problem.