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Case Description
Case Description
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Case Description
In the case study we studies that the toughest situation comes in business is having the ethical
issues. It is seen that people often have two choices which have their own consequences either
bad or good. In this case study a situation is being discussed that a client’s account is being
investigating because of some rumors by Kathy Ryan. North Manufacturing is a client who had
very effective credit history with DCC. North have more than 1$ million DCC currently. He
used the company in which he is working as a credit reference. A credit officer who is working
at DCC Scott Bradley, shared an idea with Kathy Ryan that North is going to be in danger
because of failing. Kathy was also told by Scott that a million dollars order will be give them
by BB and before the procedure of filing the bankruptcy of north, a million dollar credit will
be paid to DCC. A phone call was also made to Kathy by the BP’s credit manager whose name
is Mike Walulan for investigating the experience of North to DCC’s credit. In this case ethical
issues raises in a way like if Kathy Ryan told them about the dependable condition of North
confused between her ethics and circumstances. Either she should tell truth about the
bankruptcy and financial crises of North Manufacturing or she should lie to Mr. Bradley. There
is another ethical issue of deceiving Mr. Bradley by not telling him the truth. Now it is
confusing to decide which action should be taken place by Ms. Kathy Ryan.
Stakeholders
Kathy Ryan: as the action and the decision about telling the truth and depending
situation of Mr. North is in her hands. She have to take a decision very carefully by
considering all the factors, risks and benefits of the stakeholders who are involved in it
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anyhow. There are risk of losing her job or she can put in risk the million dollar credit
of BP. There is also a risk that DCC’s credit can also be put in danger.
Diversified Consolidated Corporation: there are also chances that if BP fails to pay
amount to Mr. North Manufacturing then it is possible that corporation may be fail in
North manufacturing: if BP fails in paying to North then there are many chances that
North will be Bankrupt. But there are also chances that they can get in more problem if
they get caught about not disclosing the financial crises situation and for misleading
BP.
Basic Products: in this case study it is seen that the victim is BP as he can sue DCC
Scott Bradley, Mike Walman: they can also be affected by the decision made between
Alternatives
There are different alternates available which can be condiered by Kathy. One of them is to tell
all the truth about the North’s company e.g. North is facing financial problems to Mike
Walman. It is possible that this truth can put bad impact on the reputation of North but this
action can make her good in the looks of BP. There is also a situation that she can hide all the
information and let it go everything as it is going but there is a risk that she can put her job in
danger if plans goes in wrong direction. In this way North will be able to receive credit but she
can damage her reputation of being an honest officer as well as she can lose her annual bonus
also. There is also an option that Rayan can avoid answering many questions asked by Mike
and can go further references without nothing the North’s credit situations.
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There are some situations in the following in which I am supposing myself as Kathy Rayan
If I consider myself as Mike, then I would like to be told everything about North by
Kathy as a friend.
If I consider myself as Scott, then I would like to be told just Basic things about North
like he used to pay on time to DCC and to forget about the financial crises of North.
If I consider myself as Kathy, I would like to do the right thing. As if I hide the
information there are chances of losing the bonus or job as well and if North goes
bankrupt then there are chances that Mike’s company can also be bankrupt.
Practical Constraints
There is only one practical constraint that is Kathy has that kind of information to which she
cannot share to anyone nor she cannot hide. She is a friend of Mike but she cannot damage the
reputation of Mr. North by taking any action. She is also friend of Mike and she thought to do
compromise by not giving any kind of information to him about the financial trouble of North.
As it is said that a friend is a person who always keeps your secrets and if she did that and kept
his secret then she could do wrong with her ethics. But she completed her friendship because
when a phone conversation was made between Kathy and Mike and Mike asked her about the
reason of her worrisome she did not shared anything with him that was told to her by Scot.
Although there was no problem in telling everything to Mike about checking the financial
statements of North because that statements were already availalble in public domanin but she
did not gave him any red flag about North’s situation. If she does it, it was not considered
unethical but she could break the trust of Scott. In this way she could damage the reputation of
Kathy, she could lose her job or her bonus if everything comes in front about the bankruptcy
of North. But, Kathy should not stop because of that. Kathy’s reputation and career may suffer
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if North files for bankruptcy and DCC holds $1 million in trade credits for which she is
responsible.
Conclusion
The best action that Kathy can take is to inform everyone about the bankruptcy of North. There
are chances of having pain initially from DCC but she can viewed as a hero in the eyes of
people. This decision can help Basic for not supporting North. In this way Kathy can also get
a good opportunity for another job. This decision can also give a example to other corporations
for not hiding the financial crises and putting all the burden to someone else and facing the
troubles created by someone else. For dealing with this situation, Kathy should form a good
plan with complete transparency. She have to inform everything about North to DCC and BP
which will help them to make a way for handling relationships with North.
The next step would be taken by DCC, DCC will find another company to replace North’s
business. North also should to restore any kind of credibility that he can do.
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References
Peterson, H(Nov,2016). Sears suppliers fear the company is going bankrupt. Retrieved from
http://www.businessinsider.com/sears-suppliers-fear-the-company-is-going-bankrupt-2016-
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from https://www.investopedia.com/terms/i/insiderinformation.asp
U.S. Securities and Exchange Commission. (Jan, 2013). Insider Trading. Retrieved
from: http://www.sec.gov/answers/insider.html