1. Table Tennis for a Cause
Issues
Options
Recommendations
Senior Seminar in Finance

2. Issues What is (are) the problem(s)?
Does Andrew have an obligation to act?
7/28/2019
Senior Seminar in Finance

3. Options Possible actions:
Do nothing
Resign immediately
Talk to Gene
Talk to Board President
Talk to sponsor
Call the IRS
Call the police
What framework should be used to determine best course of action?
7/28/2019
Senior Seminar in Finance

4. Decision criteria-”filter”
Evaluate alternatives on the basis of:
Creates or helps create a solution
Retain firm reputation
Retain Andrew’s job and reputation
Is the legal, right, ethical thing to do
Prevents future ethical situations
7/28/2019
Senior Seminar in Finance

5. Ethical Framework Vulnerable organization
No real ethics code or practice in place
Poor risk management controls
Culture of aggressive growth in sales and profits
Very high short term pay incentives linked to stock price, sales, or profits
High levels of debt
Market downturns reveal “cracks”
7/28/2019
Senior Seminar in Finance

6. Ethical Framework Vulnerable person Job stress and/or insecurity
No prior consideration of ethical issues
Existing conflicts of interest
Failure to consider implications of situations and their consequences
Failure to be aware of organization’s ethics policies and practice; haven’t identified the person to “talk to” if problems arise
We’re all prone to “slippery slope” when facing ethical problems
7/28/2019
Senior Seminar in Finance

7. Ethical Framework A. a sure gain of $2,500
Consider this question:
If faced with the following options, which would you choose?
A. a sure gain of $2,500
B. a 25% chance of gaining $10,000, but
a 75% chance of no gain
7/28/2019
Senior Seminar in Finance

8. Ethical Framework No consider this:
If faced with the following options, which would you choose?
A. a sure loss of $7,500
B. a 75% chance of a $10,000 loss, but a 25% chance of losing nothing
7/28/2019
Senior Seminar in Finance

9. Case Framework What is/are the case question(s)?
What’s the proper approach/framework to answer case question(s)?
Conduct the analysis, given approach/framework
Make recommendation, providing support
7/28/2019
Senior Seminar in Finance