Linda, a top salesperson of the FirstAmerica Bank, was working on an agreement with Poseidon Cruise Lines for the funding of a new cruise ship. Taking advantage of the lack of knowledge of the executives of Poseidon Cruise Lines on financial structures, Linda shot up the deal with a high-profit margin. She asked the help of an assistant to send a misleading fax just so the deal will not be held up. The assistant is in a quandary on what steps to take.
Joseph L. Badaracco Jr.; Jerry Useem
Harvard Business Review (394060-PDF-ENG)
October 20, 1993
Case questions answered:
- Take the viewpoint of the unnamed main character (protagonist) in this Conflict on a Trading Floor (A) case. What are the stakes for him in this situation, meaning what could he gain and what could he lose?
- What options are available to him?
- Which option would you choose?
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Conflict on a Trading Floor (A) Case Answers
Executive Summary – Conflict on a Trading Floor (A)
The protagonist in this “Conflict on a Trading Floor (A)” case is currently experiencing an ethical dilemma between sending a misleading fax regarding market interest rates to Poseidon or not. His career and moral integrity are naturally at stake.
However, the potential action he takes will have a farther audience, with a much longer-lasting impact on others, especially on the company itself. It is bound to lose its customers in the long run if the protagonist was to send the fax.
In considering the action of the protagonist, we take on the Effective Altruist philosophy to fully consider the true consequences of the actions upon others (Bowen, 2016).
We only consider the effects on all stakeholders apart from the protagonist himself to minimize personal biases (Mill, 1859).
In doing so, we propose three alternatives to simply just sending versus not sending the misleading fax: 1. Discuss the dilemma with Linda, 2. Send the fax along with extra documents, and 3. Take the issue to the CFO.
To objectively evaluate the three, a variety of basic ethical frameworks is used1, most notably the degree of adherence to best practices, but the viability of the option is most stressed.
The first option establishes reliability for Linda but will likely fail due to her past actions against any attempts of the protagonist to inquire about the deal.
The second option checks all the best practice principles and satisfies all duties but involves a very high risk of failure as well, and it may not be appropriate for a junior position to make such a decision.
While the last option contains some personal potential losses, namely being placed under more scrutiny, it has a high rate of successfully being carried out given that it acts in fiduciary obligations to both sides of the parties, Poseidon and First America Bank, and will likely elicit serious attention from the CFO.
Despite the odds, the protagonist might even get rewarded for the professional integrity that he had always wanted.
The stakes of the protagonist
To start with, the direct consequences of sending versus not sending the misleading fax to the protagonist are analyzed. Both ways, the junior salesman, will face gains and losses.
The decision to send the fax to Poseidon will result in many benefits in his career progressions: if the deal goes through without any suspicion arising from Poseidon’s side, he will stand to receive a big bonus and likely a promotion.
The same applies to his boss, Linda, as well. She will be gaining a bonus owing to his help, which will further strengthen their relationship and pave the bright future that he so desires in First America.
However, this would mean committing a dishonest act, which is in direct violation of the protagonist’s religious belief, which could cause him guilt and reduce his self-esteem in the workplace.
Furthermore, he also risks being named as part of the fraudulent activity if the whole story is exposed. This could destroy his still-young professional life.
On the other hand, not sending a misleading fax…
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