Twimble announced Finch as his choice to head the mailroom, however the book warns not to stay in the mailroom too long. Finch recommends Frump for the promotion instead of himself, for the good of the company. Twimble is reluctant to promote Frump because of his laziness, but Frump promises to be a good employee (“The Company Way (Reprise)”). Twimble and Bratt are both impressed by Finch’s selfless decision, and Bratt offers him a job as a junior executive in the Plans and Systems department, headed by Mr. Gatch, much to Frump’s dismay.
An extremely attractive but air-headed woman named Hedy LaRue, Mr. Biggley’s secret mistress, is hired as a secretary. Her entrance attracts the attention of all the men in the office, prompting Bratt to explain the office policy on flirting (“A Secretary is Not a Toy”). Finch learns from Mr. Biggley’s secretary, Miss Jones, that Biggley is a proud graduate of Old Ivy college. In the elevator at the end of the day, Rosemary’s fellow secretary Smitty helps her and Finch set up a date (“Been A Long Day”). After they leave, Frump runs into Biggley and Hedy and realises the nature of their relationship. He blackmails Biggley into giving him a promotion, by threatening to tell his mother (“Been A Long Day (Reprise)”).
Finch arrives early Saturday morning and sets up the office so it looks like he has been working all night, knowing that Biggley is coming in to the office soon. Finch convinces Biggley that he is also a proud alumnus of Old Ivy and they sing the Old Ivy fight song (“Grand Old Ivy”). Biggley demands that Finch be given his own office and secretary, and Bratt assigns Hedy to him. With the book’s help, Finch realises that Biggley must be Hedy’s advocate and sends her on an errand to Gatch, well aware that Gatch will make a pass at her. Gatch falls for the trap and is sent to Venezuela, and Finch is promoted to his position as head of Plans and Systems.
At a reception for the new Advertising Department head, Benjamin Burton Daniel Ovington, Rosemary hopes to impress Finch with her new dress, a Paris original. However, all the other women arrive at the reception wearing the same dress (“Paris Original”). Hedy, who has had too much to drink, goes up to Biggley’s office to shower. Frump schemes for Biggley to catch Finch kissing Hedy in his office, but after LaRue blackmails Finch into kissing her, he realises he’s actually in love with Rosem
