Phar-Mor Case Study

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Phar-Mor was a drugstore chain that had 310 stores and over 25,000 employees. It was a young company that made prominent success in the span of less than 10 years. With this success, however, came issues that challenged ethical decision making by key stakeholders in the company. The key stakeholders in the case primarily involve Mickey Monus, the COO who made the initial decision begin the trend of fraud within Phar-Mor. His is driven by success – a character driven by ego with internal blinders that hides empathy from the external consequences he contributes to. Patrick Finn, the CFO of Phar-Mor, was also a main stakeholder reporting to Monus about the losses, succumbed to the confidence of Monus and compensated his own values for the profit …show more content…
In this case, Shapira reveals his lack of ethical values, and Cherelstein would have to retreat to concrete levers about the financial situation they are in. It could be that the auditors do not call and visit a store with phony inventory. The suppliers could get fired up and eventually sue for their payments, which could cause a potential investigation on their finances. The multiple financial institutions can begin requesting repayments, which would put the company further into debt. Ultimately, the powerful and persuasive response that Cherelstein has on Shapira is that: someone will find out, and once that happens, it will make the situation magnify to an incomprehensible level. If the scenario arises where all other individuals in management disagree with Cherelstein, Cherelstein could potentially wait until the last minute before the fraud is found to tell the SEC, for the sake of the 25,000 employees to keep receiving payments until fraud is found. Without doubt, with Cherelstein’s moral intensity and moral character reveals in his interaction with Monus, he will commit to a morally ethical

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