Click here to post your answer to this month’s question. The best entry receives a $50 gift certificate at a local restaurant!
Joe Slick, owner of several fast food restaurants called “Slick Town,” which specialize in greasy and “slick” foods, now wants to open a new restaurant in a city near you—with all the appropriate bright, flashy neon signs. Upset as usual that he has to ask permission from anyone to open his “slick” food locations, he goes down to the local city permit office to get all the appropriate approvals.
Scarlet, the local city planner, has agreed to meet with Joe and to inform him of all the requirements. As she conducts her investigations before the meeting, she notices that in many of Joe’s other locations, he’s had problems with excess oil and grease flowing from his establishments—much to the disappointment of his neighbors. One recent “oil flow” appears to be out of control, spreading throughout the neighborhood and threatening the local environment and water supply. When Scarlet and Joe meet, she informs him of her concerns about the oil and grease problem he’s experiencing. Joe, in his usual temperament responds, “Frankly, Scarlet, I don’t give a… (you know the rest).”
Anyway, Joe knows a few people in the right places and decides a little money (actually a lot of money) in the right hands can move this project forward regardless of his “oily mistakes.” Joe thinks “greasing the palms” of the right people in the right agencies will let him get what he wants.
The cost of opening the “grease joint” is set at $12,000, with rent being $1,000 a month, operating costs at $24,000 a year (and only $6,000 of that for the two employees…a reflection of his belief that workers are only worth room and board with a little spending cash). The big expense is the alleged donations to the right agencies, which, in this case, is Scarlet’s boss. Joe plans to pay $48,000 to assist in the agency’s decision. With this investment, Joe appears ready and “permitted” to open his business.
Business Development Principles
It’s the policy of Slick Town to strictly observe all applicable laws in all of the places it conducts business. Slick Town considers legal compliance to be a part of every manager’s and employee’s job responsibility, and it’s a specific category in the performance evaluation and compensation systems of its executives. In addition, all employees of Slick Town who are at or above the level of supervisor are required to participate in regularly scheduled training sessions covering various aspects of legal compliance.
Slick Town’s policy doesn’t stop there. Even where the law is permissive, Slick Town chooses the course of the highest integrity. Local customs, traditions and mores differ from place to place, and this must be recognized. But honesty isn’t subject to criticism in any culture. Shades of dishonesty simply invite demoralizing and reprehensible judgments. A well-founded reputation for scrupulous dealing is itself a priceless company asset.
Send an email to consultants@californiabusinessdevelopment.com for ways to improve your legal compliance and to develop a positive and ethical culture.
Time to dig deeper
Joe, being the “slick one,” figures that with today’s dismal unemployment rate, he can get decent people to work for him as independent contractors instead of as employees. He believes he can save a lot of money if he only pays a percentage of sales rather than an hourly rate…even below minimum wage. So, he tells his “servants” that they can work at the “grease joint,” where he’ll tell them exactly what to do and when to do it and, along with his generosity in supplying them with everything they need, they’ll get paid based upon performance—as high as 5 percent of the gross sales they create.
Since he figures they’ll be eating all the time anyway, he offers a seven-hour workday so long as they don’t take breaks or have any of the “lunch time” stuff. Joe also makes them all managers because, that way, he figures he can get around the “overtime pay” and create a collaborative environment where everyone’s equal—except him, of course, since he’s the boss.
Do You Have the Answers?
Test yourself here and then find the answers and further discussion at www.northbaybiz.com or email consultants@californiabusinessdevelopment.com.
1. How much will it cost for Slick Town to operate for two years?
a. $96,000
b. $132,000
c. $102,000
2. According to Slick Town’s policy on business ethics, what’s the level of compliance?
a. About 30 percent
b. A little more than 60 percent
c. He’s in trouble.
3. As far as his employees, is Joe in compliance with the EDD or the labor commissioner?
a. Actually, the “servants” are employees and not independent contractors.
b. The servants are employees and are entitled to a “lunch time.”
c. Since they’re being paid by a “percentage,” they’re independent contractors.
How Business Smart Are You?
What can Joe do to improve his ethics?
Click here to post your answer to this month’s question. The best entry receives a $50 gift certificate at a local restaurant!
