WA Unit 04 BUS 5115 - BUS 51115: Case Study “The Good Credit Reference” PDF

Preview

Summary

Written Assignment Unit 04 Case Study ​“The Good Credit Reference” BUS 5115: Business Law, Ethics, and Social Responsibility MBA Term 2 , AY 2021 Name: Ali M. Ashik Instructor: Professor Robin Kazmierczak December 08, 2020Introduction In the real world in business practice, all ethical decisions sho...

Description

BUS 51115: Case Study “The Good Credit Reference”

P. 0

Written Assignment Unit 04 Case Study “The Good Credit Reference”

BUS 5115: Business Law, Ethics, and Social Responsibility MBA Term 2 , AY 2021 Name: Ali M. Ashik Instructor: Professor Robin Kazmierczak December 08, 2020

BUS 51115: Case Study “The Good Credit Reference”

P. 1

Introduction In the real world in business practice, all ethical decisions should be aligned -based on company’s rules and regulations. Very often some critical issues or problems might not be resolved under the business own criteria or standard because of the inherent connection of ethics and existing laws. “Dilemma” is then created to resolve the dilemma or overcome the obstacle we need to depend on general ethics , core principles and corporate laws. In the case of “The Good Credit Reference '' there are some ethical dilemmas and controversies ,we need to resolve finding out the facts lied in it The main facts of the case 1. Kathy Ryan, Trade Credit Officer of Diversified Consolidated Corporation (DCC) is responsible for credits to North of approximately $1 million. Because of rumours she visited the North and knew some internal information of the North that it was struggling in running business because of the financial crisis and trying to get a big credit from Basic to overcome the trouble. 2. Scott Bradley, Treasurerof North Manufacturing has a good relationship with Kathy and maintains a good credit record with DCC and shared some internal financial information with Kathy. North refers to DCC as a credit reference with other suppliers and wants to keep their good credit record with DCC. Also, commited to pay off DCC credit promptly. 3. Mike Walman, Credit Managers, Basic Products who is a friend of Kathy, wants to know about North credit performance to make a decision to sanction the requested credit. Resolving Dilemmas Using Ethics

BUS 51115: Case Study “The Good Credit Reference”

P. 2

1. Confidentiality: As North manufacturing is a client of DDC hence according to the Client’s Confidentiality code of ethics, Kathy has a moral and professional obligation to keep North’s present status confidential (SEC.gov.,2009). (2) DCC Policy: As a DDC employee or representative, Kathy ought to follow her company policy as standard and guidelines of making a decision to share client’s information to a third party. (3) Fiduciary Duty: As an employee or Manager, Kathy has a fiduciary duty to protect her company’s and its shareholder’s interest first, regardless of other considerations. (SEC.gov.,2009). (4) Misleading information: Also, after drinking (alcoholic drink) several times Scott Bradley might be intoxicated and information provided by him to Kathy may be misleading of the reality. The action that Kathy should take As the north is still in business with some crisis and trying to get further financial support from Basic products to reorganize and overcome its bad condition and not to go bankrupt. Also, getting credit for business is a right of North manufacturing that Kathy can’t deprive from it. Kathy ought to put her company policy and interest over any personal relationships and the interest of any other company. Though there is a

possible conflict of interest involved with Kathy, it is under or

included with the greater interest of her company. Following DCC policy she should provide Mike the usual “prompt payment history” and positive credit reference for North Manufacturing. This decision will protect her company interest, help to recover her company that will intact shareholders interest; be supportive of her career as well as it will give a good chance to North Manufacturing that getting Basic's credits, they will be able to reorganize their business and get away from potential bankruptcy. In the view of “Utilitarian” Kathy’s such move pursued the greatest good for the greatest number as it will bring benefits for DCC and North Manufacturing, though there is a possibility of jeopardizing Basic Products interest and friendship with Mike (Business Ethics, 2012). According to right-based ethics, her decision has a moral standard as right-based ethics refers “to have a right is to be in a position to determine by one's choices, what others should do or need not do”( “Examples of Rights”, n,d.).

BUS 51115: Case Study “The Good Credit Reference”

P. 3

The Stakeholders of The Case: The stakeholders of the case are Kathy, Scott, Mick as well as their respective companies, and their employees, shareholders, suppliers, raw material producers, creditors, customers and local community - all of them may be affected either positively or negatively by the decisions of the companies (Chen, 2020). Poses possible alternatives and ethics of each alternative (1) This is a very big and complex matter that should not be handled alone, hence Kathy could share this matter with the top executive - Director or President so that she could secure safe position and get an appropriate decision to way of the dilemma. (2) According to justice or fairness concepts, Kathy could tell the internal information of North what she knew from Scott that could protect Basic’s interest and it’s stakeholders, but it could cause a breach of trust to North Manufacturing. Also, her leaking of confidential information would go against the principle of “utilitarianism” aspects, because it could protect Basic interest but it could jeopardize the interest of the largest number of stakeholders among the three companies. ( Ivy Panda, 2019). Constraints that May Arise Kathy’s such a choice might have practical constraints or bad consequences - losing bonus, demotion, or even job loss because it might cause an earlier bankruptcy of North Manufacturing and create a catastrophe for Kathy’s such a choice might have practical constraints or bad consequences - losing bonus, demotion, or even job loss because it might cause an earlier bankruptcy of North Manufacturing and create a catastrophe for employees and stakeholders; no further credit recovery would be possible from North Manufacturing that could be a cause of a big financial problem for DCC or even a risk of bankruptcy. Then, Kathy might be accused of breach of confidential agreement and deception with fiduciary duty, and she may face further legal action by her company. Recommendation with Conclusion

BUS 51115: Case Study “The Good Credit Reference”

P. 4

In the corporate world, ethical dilemmas very often arise in everyday business practice and decision making. But there is no common ethical standard for every business entity or every case of dilemmas alike to resolve it. To solve the dilemmas we need to depend on common ethics, corporate code of conduct, inherent reality of problem; and must bring into consideration the better good, corporate social responsibility and sustainability aspects.

References SEC.Gov. (2009, June 15).Code of Business Conduct And Ethics. Retrieved from https://www.sec.gov/Archives/edgar/data/1005731/000119312509217321/dex1401.htm#:~:text=Ea ch%20employee%20must%20maintain%20the,required%20by%20law%20or%20regulations. Business Ethics (2012). Creative Commons by-nc-sa 3.0 license. Retrieved from http://2012books.lardbucket.org/books/business-ethics/index.html Examples of Rights-Based Ethics (n.d.). Examples of Rights-Based Ethics. Retrieved from https://examples.yourdictionary.com/examples-of-rights-based-ethics.html Ivy Panda (2019, February 6). Business Ethics: Utilitarianism, Rights, Justice, Caring, and Virtue theories Essay. Retrieved from https://ivypanda.com/essays/business-ethics-utilitarianism-rights-justice-caring-and-virtue-theories/ #:~:text=Justice%20as%20an%20ethical%20approach,or%20even%20their%20social%20classes. Chen, J. (2020, March 4) .Stakeholder. Retrieved from https://www.investopedia.com/terms/s/stakeholder.asp#:~:text=A%20stakeholder%20is%20a%20p arty,employees%2C%20customers%2C%20and%20suppl

BUS 51115: Case Study “The Good Credit Reference”

P. 5...