You are on page 1of 6



My supervisor [Or another appropriate person, including yourself!]

[Your name]
[Todays Date]


Dealer Credit Extension

In this memo, I recommend that our bank do everything in its power to ensure that
the Jones RV dealership retains its credit line. Specifically, I recommend that we call a
meeting with Amanda and other higher level managers to discuss our organizations
ethical responsibility to the employees (and surrounding business community) of the
Jones RV dealership and the impact we will have if we cancel the credit line.
Key Facts & Background
The Jones RV dealership was severely hit by the recent economic recession,
causing the owner of the dealer to fund the business with personal credit
YTD dealership revenue is back on track and Jones has cut costs, laid of
employees, and reduced his own salary.
Jones recently leased his neighboring real estate property for $2,000 p/m.
Jones has exhibited exceptional business acumen, tenacity and made
enormous personal sacrifices to keep his business alive. Given the recent
improved economy and additional monthly income, the business is likely to
survive, although another economic downturn could change this outlook.
Amanda may cut of the credit line if she finds out Jones used personal credit
cards to fund the business, potentially forcing them to go out of business.
Whats (Ethically) At Stake:
The obligations that our organization has to one of our stakeholders (a
The opportunity to act dishonestly, or at least not be completely transparent
according to standard professional practice, in order to possibly save numerous
people their jobs and economic livelihood.
The obligations I have to the firm to act as an agent on their behalf, in the
manner I have been trained for my role (i.e. the standard practice of reporting
all details)
The primary ethical decision is whether or not to omit the credit card
information from the report that will be sent to Amanda for approval.
If we include the information, we must next decide how much energy & efort
(if any) we should expend in attempt to ensure that Jones credit line does not
get cancelled.
Potential Stakeholder Impact
The primary stakeholders concerned with this case are our banks
shareholders, our internal team, and the dealership, its employees, and the
surrounding community (Exhibit 1).
There are numerous possible outcomes depending on which course of action
chosen (Figure 1.1) with varying degrees of impact to the stakeholders
(Figure 1.2). One important thing to note is that no matter what course of
action we choose, there is no guarantee the business will shut down or survive.

By keeping the credit line open we give the business the best chance to
Each of our own team members is a stakeholder in this decision and needs to
be treated with respect (Exhibit 2). The decision could not only impact our
jobs but our integrity (Figure 1.2).

Basis for Recommendation

1) I recommend that we disclose the credit card information on our report to
o Failure to make this disclosure is a form of dishonesty and exhibits a lack
of virtue. Also as Christians, we are called to truth and should have no
part of lies (John 8:44).
o Failure to make this disclosure could cause me to live in fear of being
found out. This alone is a sign its not right. As a Christian, I want to be
a person who lives in the light (John 3:19).
o It would be irrational to support a principle where everyone in my
position did not disclose all of the facts available all of the time. It is
contradictory to good business practice and such a rule could not be
endorsed by everyone in the organization.
o Failure to make this disclosure amounts to disrespecting Amandas
judgment (Exhibit 2).
o Failure to make this disclosure could have bad consequences for our
bank shareholders and our own jobs.
o Given that there are clear ethical and Christian principles I would be
violating (see points above) and that both good as well as bad
consequences may arise from a failure to disclose (Figure 1.2), there is
no way the consequences of saving the dealer could be used to justify
this action.
2) Nevertheless, I recommend going above and beyond to convince Amanda to
keep the Jones dealership credit line open.
o We need to exhibit courage in confronting Amanda on this issue and in
arguing on behalf of Jones.
o Jones has done everything the bank had asked him and hes already
seen recovery, so there is a sense in which it is just for us to uphold
our end of this business partnership.
o We view all stakeholders as valuable, and therefore we should do
everything in our power to help save the economic livelihood of the RV
dealer s employees, as long as it does not significantly endanger other
stakeholder groups. Given the facts of this case case, our shareholders
do not seem to be taking on undue risk.
Anticipated Consequences / Possible Risks
See Exhibit 1 for various possible outcomes.
By getting other high-level managers involved in this decision (per my
recommendation), we risk upsetting Amanda or making her feel disrespected.
Nevertheless, our obligation to the Jones dealership makes this is worth the

By disclosing the information to Amanda, we have no guarantee that well be

able to sway her to leave the credit line open. The risk still exists that our
company could therefore be complicit in the harm done to the RV dealers
employees and surrounding community.

Exhibit 1 Possible Outcomes for Stakeholders

There are numerous stakeholders that could be afected by my decision. The marketstakeholders include the banks shareholders, my immediate Chain of Command
(which includes myself, my supervisor, and Amanda), the dealership owner, and his
employees. The non-market stakeholders include the community that surrounds the
dealership along with any potential businesses that it either (i) do business with the
RV dealer or (ii) are otherwise be impacted by it. There are a number possible
outcome scenarios that might result from out decision which are illustrated in Figure
1.1. The anticipated impact of each of the four main outcomes to each stakeholder
group are outlined in Figure 1.2.
Out of Business
Credit Line

Figure 1.1

Credit Line

Dont tell

Out of Business

Figure 1.2


Scenario 1:
Tell AmandaCredit line closes

- This reduces the

potential financial
risk to the bank
and its
- Bank loses some
income by losing a

Scenario 2:
Tell AmandaCredit line stays

- Bank would have

been fully informed
of risks (full
transparency) and
if management
decided to leave
the credit line open
anyway, it would
be doing so with
full knowledge of

Employees &
- In all likelihood
the dealership may
be forced out of
business, costing
many people their
- However, it is
possible that the
dealership could
find financing with
a diferent bank
and survive.

- Most likely
dealership survives
based on recent
turnaround eforts.
- However, dealer
could still close if
economy worsens

My Chain of
- If I follow standard
practice, it will be
business as usual.
Unless I bring it up,
no one will even
know of the
- If I dont point this
out in some way, I
may not be
contributing to
others positive
freedom by
allowing us all a
moral learning
- In order to
convince Amanda
to keep the credit
open, I would most
likely have to argue
on behalf of the
dealer, which
would put my
reputation on the

- Dealer could still

go out of business

Scenario 3:
Dont tell- Credit
line stays open

- No harm to
- Income generated
from keeping

- Employees keep
their jobs.
benefits from
ongoing business.

Scenario 4:
Dont tell- Credit
line stays open
Dealer out of

- Harm to
shareholders. Not
exactly clear how
much harm, since
loans backed by
equipment as
collateral. But we
can assume this to
be significant.

- Employees only
temporarily keep
their jobs.

- Although I feel
good that I helped
keep dealership
alive, I live with the
possible fear that if
the dealer doesnt
survive and I am
found out I could
lose my job.
- If discovered, I
probably lose my
job or face
discipline. If not
discovered, I live in
fear that I will be
found out.
- If discovered, I
could potentially
cost my boss or
Amanda their jobs
too, as they are
responsible for
training and
managing me.

Exhibit 2 Amanda as a Stakeholder that Deserves Respect

Ends vs. Means
In thinking about how we approach Amanda, we need to remember that she is
a stakeholder in this decision as well. Even though I am convinced that the
Jones dealership deserves to retain its credit line, I should not view Amanda as
simply a means to that end.
To treat Amanda with respect and as an end herself, I need to not only disclose
full information to her, but in making my case I need to be respectful of her
point of view and not accuse her of being irrational, etc.