have you ever faced an ethical issue in person or on the job? An individual's decision must be taken into account in this matter. It may include decisions you have taken in relation to recruitment, dismissal or evaluation of staff. Or it could involve your handling of a directive that you consider to be an infringement of civil or religious law, such as company policy or direct orders from your supervisor. 

 

Identify the situation which leads to a problem or an issue: business background and context, key stakeholders' views on this subject as well as appropriate legislation and policies.  

 

Explain the problem: what is it that's bothering you? Is there a decision that needs to be made?  Who's in charge of making this decision and responsible for it? 

 

Talk about how you would use a biblically based assessment method to reach an outcome in your example.  What's your decision and why did you make it? Why'd you refuse to take any alternative decisions? 

 

Utilizing the following Case Study: Banking : Truth telling or Compassion

 

You work for a major bank that extends commercial lines of credit to auto, RV, and marine (boat) dealerships for the purpose of stocking their inventory to be sold on a retail basis. The inventory that is purchased by a dealer is financed through the credit line and serves as collateral to the loan. The loan is paid off immediately following the sale of the unit, allowing room on the credit line for additional orders. A line of credit like this is the life-source of a dealership, for without it, business failure is almost certain. 

 

You manage and underwrite a portfolio of loans serving dealers primarily based in the Midwest. Your job is to evaluate both the risks and mitigating factors on each account and draft a write-up with a recommendation to continue, terminate, and/or adjust the terms of a credit line. The recommendation gets approved by at least two levels above you in the bank's corporate offices. It is common for you to come into contact with most dealers numerous times a month- sometimes on a daily basis. 

 

Recently, a small RV dealership was due for a standard annual review in order to determine if credit would be continued or terminated. This dealer was one of the many RV dealerships severely affected by the economic recession in 2008 (as well as 2009 for many RV dealers). 

 

The dealer had taken a loss in the previous year, which had weakened the balance sheet. In a conversation with the dealer, he revealed to you that he was using personal credit cards to help fund the business but had already significantly reduced the credit card balance in the last six months, when his credit bureau report showed he had racked up $60,000 in credit card debt to fund the business. Another two or three quarters of losses could very well put the dealer in an insolvent position, requiring the bank to pick up the inventory and potentially take a loss on the auction sale of the inventory. 

 

Despite the recession, the dealer had been doing the right things to get back on the right track and had verbally reported that in the current year, numbers were doing much better. Numerous measures were taken by the dealer to cut costs, including laying off additional employees and reducing his personal salary to minimal levels. The most promising mitigating factor, however, was that the dealer had owned real estate property adjacent to the dealership that had been vacant for numerous years but was recently leased on a two-year contract that would bring him $2000 monthly cash flow. 

 

After evaluating all factors, you conclude that the dealer would make it through the difficult season and that the bank could be confident that no losses would occur. Furthermore, you believed the majority of higher management would agree, except for Amanda, who held the highest level of approval authority, and who would automatically elect to terminate the account simply because the owner used personal credit card debt to fund the business. 

 

You are wondering whether to omit the information about the owner's credit card debt on your recommendation and write-up. It is standard practice to put down every detail and lay out all risks, yet you also know that Amanda is likely to lose all objectivity and rationality after learning the business was partly funded on credit card debt for a reason. Both the bank's capital as well your job could be at risk if the bank took a loss. The owner had done everything the bank had asked him, and he had already seen recovery. Furthermore, a decision to close the credit line would likely force the dealership out of business. 

 

1) Is it ethically appropriate to omit the information about the owner's credit card debt on credit assessment for the sake of the dealer's survival as a business? Are the number of jobs potentially saved worth omitting the information? 

2) How strong is your obligation to your employer when you don't agree with what will likely be their decision? How do you balance compassion for the dealer with your covenant obligation to your employer?

Answer rating: 100% (QA)

1 Ethical Consideration Omitting Information on Credit Assessment The decision to omit information about the owners credit card debt on the credit ass... View the full answer