Unethical Practices in IOOF: A Case Study

Running Head: MANAGEMENT ETHICS
Management ethics
Student’s Name
University Name
Author’s Note

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Table of Contents
Case Analysis 1: Case Study 1........................................................................................................3
Introduction..................................................................................................................................3
Discussion....................................................................................................................................3
Conclusion...................................................................................................................................5
Case Analysis 2: Case Study 2........................................................................................................6
Introduction..................................................................................................................................6
Discussion....................................................................................................................................7
Conclusion.................................................................................................................................10
Case Analysis 3: Case Study 3......................................................................................................10
Introduction................................................................................................................................10
Discussion..................................................................................................................................11
Conclusion.................................................................................................................................12
Reference List................................................................................................................................14

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Case Analysis 1: Case Study 1
Introduction
The issues regarding the franchise disbursement of the RFG group is evident in the case
study. Hundreds of the franchises of the group have been devastated financially after signing up
with any of the high end value brands of the Retail Food Group. The attitude of RFG group
towards the franchises became evident when Andre Nell reported the Group chairperson that his
Donut King franchise was closed down like the other several outlets of the same brand under the
RFG. In almost cases of close down of the franchise stores of RFG, the organisation had left to
stones unturned for extracting the hook on rent for the shops as well as the business dividend for
the stipulated contract period. The RFG group is the biggest operator of the food franchise chains
around the country. The chief brands comprising the business segment of the RFG group are
Donut King, Brumby’s Pizza Capers, Crust Gourmet Pizza, and Michael’s Patisserie and so on.
The market capital value of the organisation is about $800 million and the number of stores of
the organisation is about 2500.
Discussion
The organisation RFG has been able to gain double digit profit returns on the equity as
well as accountable for the fat dividend payouts to the shareholders. The business model of the
organisation have been profitable for the organisation’s shareholders, whereas the company has
gained the reputation of being the franchise amalgamator since it have been spending over $500
million in the last decade on the 15 acquisitions that have been incorporating including Crust
Gourmet Pizzas, Pizza Capers, coffee chain Gloria Jean's, Café2U, DiBella Coffee and Hudson
Pacific, a food manufacturer and distributor. The organisation’s negative reputation have been

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built as an organisation that is involved in wage fraud where the employees share the liability of
making the end meet and pay the company the necessary dividends to the organisation, in spite
of all the issues that the franchise have been facing in terms of expanding their businesses. The
employees of coverage of the organisation were under the coverage and protection of the veil of
ignorance. The test of fairness will hold that the members of the organisation did not have any
clue to their privileges, advantages, disadvantages or even their personality. They exited as
impartial group working towards the fulfillment of the organizational goals. The sham
employment contracts that have been provided by the company to almost all the franchise
owners of the organisation, along with underpayment of their overseas workers is the procedure
that the organisation have been utilizing in order to compensate for the business loss that is
bearable by the company.
In fact the condition of the business of the organisation has also been deplorable. The
RFG group had purchased the Brumby’s during the time when the store chain had high growth
chances and at that time they owned 321 stores. However, after the acquisition, the number of
stores should have been 600 at least. However, in reality the franchises have either gave away
with their business or they gave grown to the state of maximum prominence. However, the
proportion of the latter kind of franchises is the least. The franchises have grown poor earning a
bare living out of the stores, keeping the business alive only because they did not have the
necessary resources for starting any new venture. On the contrary, there have been no help
coming from the end of the RFG management who continued t display a business model that cuts
out all overheads, pressurizes for the rebates and keeps the shareholders happy by extracting
maximum monetary benefit from the franchises in the form of chargeable fees (Ferguson 2018).