How are we to allocate the blame for this? The managers may not be under orders to cheat their underlings, and I think the morally required action is to quit (and blow the whistle) rather than do so, but the blame certainly doesn't stop with them. Upper-level management who put pressure on lower-level management to achieve impossible results surely bear some blame, but they didn't order the theft.In this specific case I'm more inclined than Matt to blame the managers who are directly responsible. However, more generally, I do think the idea he's getting at about "institutional evil" is a very important one.
What's going on here is an institutional evil, and I think that's a category that's much underdiscussed in philosophical ethics.* The institutions seem to be set up to put pressure on underpaid district managers, to make cheating easy, and to make it easy for the corporations to turn a blind eye to what's going on. The culpability of the whole is greater than the sum of the culpabilities of the parts. It's worth noting here that institutional practices can make a difference; note the contrast between Wal-Mart and McDonald's, which gives employees printouts of hours worked and doesn't have time shaving problems.
Actually... isn't this sort of thing a central focus of political philosophy? Asking what sorts of social/political/economic institutions are best for a society to have? How a society's institutions influence the behaviour (and particularly moral behaviour) of its citizens? I don't know enough about the field to say. Perhaps these are not considered to be crucial questions. But I really do think they should be.
Though perhaps Matt is more thinking of smaller-scale issues (as suggested by his Wal-Mart vs McDonalds comparison), which are arguably nothing to do with government or society-at-large. Instead, we're more concerned with the few people responsible for the institution in question being what it is (assuming it's possible to divorce the institution in this way from the wider society of which it is part). If you focus on individuals in this way, it does look to be more a concern of ethics than politics. But there's surely some cross-over, so I wonder if political philosophy might still have something to offer here...?