Conflict on the Operations floor

Case 3

Relevant Facts
An assistant who started her work on the operating floor. Worked 3 years from March 1986 to May 1988,
at Firt America Bank in New York.
I started as an assistant and eventually worked my way up to non-cash derivatives sales. Specializing in
interest rate swaps of various currency units
As an assistant, he had served under three vice presidents.
A high-end saleswoman named Linda. extremely volatile and very explosive in temperament, but highly
respected for her ability to close deals with praise and success for aggressive business management.
In September 1986, six months later, she began working with Linda on the negotiation of one of her
largest accounts, Poseidon Cruise Lines. (a cruise company).
Poseidon has been a client of FirstAmerica for 1.5 years, with a close relationship between Linda the
treasurer and the cruise line's CFO.
Poseidon, a company that had received benefits from FirstBank in short-term financial operations, made
loans of US$20 and US$30 million.
 8. Poseidon wanted to finance the construction of a new cruiser in a French shipyard. The most
luxurious and largest ship in its fleet. New deal or negotiation the bank's largest operation with a rather
complex structure. 700 thousand dollars over 5 years.

9. Construction of the Ship in charge of a Frenchman who established dates of payment and amount of
payments with the condition of payments in Francs currencies.

10. Management and Treasurer of Poseidon persons active in the currency market with experience in
other currency market without familiarity of complex structures.

11. 3 month meeting to set up the strategy Agreement to pay 10% to the builder. Second Poseidon
would pay interest for the first 3 years. Both companies would have interest rates per currency.
Performing simultaneous transactions.

Payment to the principal at the end of the three children as collateral.

12. Linda convinces the finance director. On the theory that being a much larger amount and making
the minimum payments would have a lower operating expense. Saving money by transferring the
responsibility.

13. Aggressive business strategy for the client, convincing the operation in a confidential manner,
manipulated arguments, for example, that the company Poseidon, if the transfer was made, could
suffer a rise in exchange rates, however, the assistant verified that it did not exceed 10 points.

14. Information given to the client for the structure of the negotiation very divorced from reality. The
client was told a profit of 1.2 million for the Bank, however the real profit was twice as much. And the
most profitable operation in the bank had been a 1.2.

15. Process of declination of the operation by the direct.

16. Information that the person in the department knew from experience and knowledge of the
market.

Problem
 Ethical dilemma of a person in the Operations department of FirstAmerican Bank for a business
transaction with a known-overvalued customer.
 Manipulation of information for a negotiation. Aggressive business strategy, abused without limits,
which could jeopardize the trajectory of an entire institution.
 Lack of regulations or policies for conducting negotiations, management personnel not involved in
large operations.
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Decision Criteria
 Poseidon's exposure to currency exchange risks as its transactions are in dollars.
 FirstBank America's exposure to any scandal or scam
 Operation not consulted by the parties involved.
 Personal questioning of another person's way of negotiating.
 Lack of policy manual and ethical criteria for negotiation.
 3-year customer support in addition to guaranteed confidence and security option.
 Training and customer loyalty that can lead to great deals and future larger transactions.
 Opportunity to support the project to create the corporation's largest cruise ship.

Alternatives
 Continue to negotiate and recommend through Linda or by writing to your former managers,
establish a code of ethics for future negotiations.

 Stop the negotiation, leaving a bad impression to the customer by eliminating future
requests due to doubts.

 Rethink the negotiation in order not to lose future business with that client or with the circle
of businessmen he frequents, in addition to guaranteeing Linda's reputation. Creating a
document or act of clarification of the business.
Recommended Alternative and Action Plan to be Implemented and expected
results.

Option: Rethink the negotiation in order not to lose future business with that client or with the circle of
businessmen he frequents, in addition to guaranteeing Linda's reputation. Creating a document or act of
clarification of the business.

Expected results
It is necessary to establish codes of ethics to strengthen the company's position vis-à-vis current or potential
customers who might be tempted to encourage salespeople to engage in unethical behavior. This can be a very
valuable tool as ethical behavior is not only morally correct, but also, in the long run, practically correct as it will
impact future business.
Since this negotiation is useful for the company, implementing the code of ethics with this alternative will result
in raising awareness among operations personnel, whether Linda, on the application of ethical and moral
principles, encouraging ethical behavior in daily actions, so that other negotiations are carried out in a "win-win"
environment, guaranteeing transparency.
Although the vast majority of times people question the negotiation strategy of a sales staff, their objective and
competence for which they were hired is to sell, working with an open mind, increasing profitability and
connectivity makes any company stronger and the best way to maintain success with a good image is to radiate.
It is time to put aside individual interests, we must orient ourselves in a country position, think big, take
advantage of nature's resources, work with an open mind and participation, be part of the change, unify efforts
to increase production and competitiveness, and ensure that large or small companies are strengthened with
efficient employees and officials who apply their knowledge with ethical and moral principles.