Connectco Case Study

Davis is the new manager of the Planning and Reporting department of ConnectCo and is responsible for managing the relationship between ConnectCo and Symbol. Davis realizes that the accounting procedures relevant to their contract with Symbol were not well documented and did not reflect the terms of the contract. ConnectCo had been engaged to supply the staffing resources that had not been filled but Symbol was currently paying for. He asked Gallagher, the Vice President of Canadian Operations and MacDonald, the Relationship Manager, how they should calculate the credit amount for the unfilled staff positions. They both agreed to go with the lowest cost option. As Davis looked through the contract, he found some troubling amendments and

Gallagher requested that Davis take the training days out of the calculations to reduce what they owed to Symbol. Davis received a call from their contact at Symbol, the Vice President of Direct Sales, Puhl, who expressed his concern that their managers were paying for services that they did not received and that the turnover was getting worse. Davis worked with Lam from the accounting department to review the data. Lam expressed concern that their accounting approach did not make sense because the company had not collected the training days data previously, and from Symbol’s perspective, they are paying ConnectCo to manage the scheduling, hiring, retention and training of IAEs. Davis felt that he had to do something about the shady accounting practices and took his concerns to the controller of ConnectCo, who told him to just let the case play out. Davis did not get any direction after a month of first questioning the credit calculations. Davis suspected that there was a lack of ethics and a culture of corruption in ConnectCo and had to decide if he should risk his job security by alerting the senior management in the company, deal with Gallagher directly, or do nothing and follow

Both Gallagher and MacDonald were mindful of the situation and the fact that the company was not upholding their end of the contract. When Davis first questioned Gallagher about calculating the credit amount for open positions, Gallagher said that he did not bring up the issue during his last meeting with Symbol and told him to go with the lowest cost and MacDonald said to do the same. Gallagher negotiated the contract with Symbol and was definitely aware of the agreement they made. He knew that, from Symbol’s perspective, ConnectCo was being paid to provide qualified IAEs and manage the hiring, retention, scheduling, and training of those IAEs. When Davis brought up the concerns with the contract and their accounting practices during their meeting, Gallagher told Davis to stop thinking like a client and take the training days out of their calculations. This shows that Gallagher was aware of the client’s concerns and ConnectCo’s responsibility to serve the client’s needs but he did not care to do so and was only concerned with ConnectCo’s side of the