Business Ethics: A Case of Trusting the Trust Accounts (A)

Answer

Business Ethics: A Case of Trusting the Trust Accounts (A)

1. What are the main arguments you are trying to counter? What are the reasons and rationalizations you need to address?

In Billy’s case, there are four arguments that Billy is trying to encounter. First regards standard or expected practice. After a few days of familiarization and introduction with his colleagues, Billy got to learn that cash was deposited in one of the company’s money marketplace accounts that earned the company meagre rates of return compared to other investment alternatives of the same risk. Billy is worried that the bank was not maximizing its earning capability of the cash in the trust accounts. He was equally concerned that the bank was keeping the cash in the bank by investing the cash balances in some money market account to boost its overall size, yet at the expense of the customer’s return. Billy, thus, believed that the bank was not doing all that was within its ability to maximize its customers’ earnings. However, because he was only a few days in the organization, Billy found it difficult to voice out his opinion. According to the argument about expected or standard practice, a new employee in a workplace should take some time to understand how their company works (Brinkmann, 2002). It is also expected that with the many years of experience that his colleagues had in the banking business, they should have understood the problem much earlier and addressed it long ago. Nevertheless, since they seemed to have had no information, it only became logical that Billy shared his findings with his seniors.

The second argument regards the materiality of the bank’s operations. From the Billy’s finding, the bank invested the cash balances in some money market account to boost its overall size, yet at the expense of the customer’s return. According to the materiality argument, an impact is considered immaterial if it does not impact on an individual or an organization (Copeland, 2015; Sepasi, 2019). In the case of the community bank, the action of investing the cash balances in some money market account would boost the company’s overall size but negatively affect the clients’ returns. Similarly, Billy noted that the cash that was deposited in one of the company’s money accounts earned it only meagre rates of return. Thus, Billy feels that the bank was not sufficiently capitalizing on its earning ability of the cash in its trust accounts.

The third argument regards the locus or responsibility. According to this argument, one fails to take action about a given problem in their workplace because they feel it is not their responsibility, and that they are just following orders (Cameron, 2015; Duska et al., 2018). Billy is perplexed because, despite establishing the undoing of the company, he does not know how to raise the issues, being just an intern. From his finance professional viewpoint, Billy feels that it is his responsibility to make right all the wrongs in the company’s Trust Department. However, he feels it is not his obligation to advice the company on the way forward since he is only an intern who works under instructions and orders, making it difficult to reveal the follies that the company may be suffering since that would only serve to depict his seniors as have been “sleeping” on their jobs.

2. What is at stake for the key parties (including those who disagree with you)?

Billy noted that the cash that the bank invested in one of the bank’s money market accounts was receiving a very small return rate compared to other investment alternatives of the same risk. Second, Billy feels that the bank is not capitalizing the earning capability of cash in its trust accounts. Third, Billy is worried that the company may be holding the cash in the bank by investing cash balances in some money marketplace account to boost the bank’s general size, yet t the cost of the bank’s clients’ returns. Fourth, Billy holds the view that the bank is doing little to make the best out of the earnings of its clients. Lastly, while he was convinced that his assessment was correct, he felt nervous regarding the findings since he only had been at the bank for short span of time and was merely an intern. He also never knew how he would raise the issue, and with whom he could.

3. What levers or arguments could you use to influence those with whom you disagree?

I could use to lever the issues and influence those who are likely to disagree with me, I could begin by joining the dots in the manner in which the bank’s cash was being invested. I could dig deep into understanding how and why the cash had been invested as it was, noting why the company chose that aspect of investment. During this process, I could initiate constructive conversations with my supervisor. In so doing, I could wittily bring my supervisor to understand my views regarding my concerns on how the bank’s cash balances can be managed at the benefit both of the company and the company’s clients. Borrowing from my knowledge in finance, I could refer to various companies that have thrived and the various approaches they employed. This way, I could be able to win the attention, interest, and audience of my colleagues who could otherwise have disagreed with me. I have to state that the process could take me some time. It could have not been an instant thing. By taking time to understand the operations of the company before raising the issues found during the analysis, I could be able to systematically and tactically win the confidence of all in the organization so that they could see the need for the employment of a new strategy.

4. What is the most powerful and persuasive response to the reasons and rationalizations you need to address? To whom should the arguments be made? When and in what context?

Billy understands the significance of maximizing client revenue and bank’s revenue to the operations of any successful bank. He is worried that the bank was not maximizing its earning capability of the cash in the trust accounts. Thus, according to the locus of loyalty, he feels that something should be rightly to ensure that both the bank and its clients earn fair returns. However, even after knowing the follies of the bank towards its clients, he is stranded on how to report his findings because he is pretty sure that he is going to hurt his seniors. Similarly, Billy noted that the cash invested by the company was receiving a very small return rate compared to other investment alternatives of the same risk and the bank was not capitalizing the earning capability of cash in its trust accounts.

Business ethics requires that in the event of an issue, one should report the concern to their colleagues and then their immediate line managers or supervisors. In the case of Billy, the immediate person to voice his issues to is Joe. Sharing of the issues with Joe should not, however, be immediately. There is need for Billy to join the gaps in the company’s cash balances management and the company’s operations, then engage Joe in conversations as he tries to understand the bank’s values, strategies, and goals and missions, before Joe can later share the concerns to the whole company staff so that in the event a change is to be initiated, the same can be owned by the whole organization. In doing so, little or no resistance to change will be experienced.

SCRIPT

CAST/CHARACTERS:

Business Ethics Expert (X) – Student Name

Financial analyst (Y) – Student Name

Community Bank Manager – Student Name

Joe – Student Name

START... ACTION!!!

SCENE 1: X and Y walk into a bus. (People talking and some songs playing in the bus).

X: You see, we need to meet the management of Community Bank today because this is the only day we can comfortably talk to them.

Y: Yes, we need to explain to them more on how well they need to restructure their Trust Department for better results.

SCENE 2: In the bus. (The Bus fast finding its way in the traffic. Background talks continue).

X: I strongly feel that Community Bank will need to consider changing their strategies to enable them meet their organizational goals while not injuring their stakeholders.’

Y: Sure, with a comprehensive explanation, I know the company will embrace the idea and proceed to implement the same. (Draws some documents regarding Trust investments and shows them to X, gesturing sufficient information therein).

SCENE 3: Arrive at the Community Bank’s Office. (Palatial background. Knock at the door. A “Welcome...” voice).

Community Bank’s Manager: (Looks Wealthy, having cosy watch and dressed in a smart expensive suit. Sound effects in the Manager’s office).

Manager: Welcome to Community Bank.

X: Good morning Sir... We have come to present our findings about your Trust Investment strategy to you (Gestures to Y to bring out the documents showing the analysis of the group’s investments’ trends and patterns)

Y: You will be allowed to ask any question that you may have after we finish our presentation. (Signals Y, is that okay?) (Both Y and the manager nod their head in affirmation)

Y: From our analysis, your bank is not fully maximizing its earning capability of the cash in the trust accounts.

Manager: Okay. (Nods his head while showing a disgusted face). Proceed.

Y: Your bank also keeps cash in the bank by investing the cash balances in some money market account to boost its overall size, yet at the expense of the customer’s return. As such, we feel that your bank has not been doing all that was within its ability to maximize its customers’ earnings.

X: Adds that the cash that the bank invested in one of the bank’s money market accounts was receiving a very small return rate compared to other investment alternatives of the same risk.

Manager: Those are shocking revelations, don’t you think so? (Looks annoyed. Stands up and walks haphazardly in his office very annoyed) I have always told these people that the strategy they are using must have had issues).

Manager: Shouts to his secretary. Call for me Mr. Joe. (Knock at the door…Tok tok tok...)

Manager: May you sit down and listen to these shocking revelations.

X: Explains the findings again.

Y: Well, don’t be disgusted a lot. We are here to share with you our findings and possible remedies that can reverse the bad investment status.

Manager: Disappointedly walks around his chair.

Scene4: They move to the bank’s Trust Department. (Office scene background. Looks well light. Staff busy at their work).

Joe: We have been running our trust investment like that for several years. Our trust department has always reported very meagre incomes.

Y: To reverse the situation, we need to employ new strategies that will benefit both your organization and your stakeholders. We will bring them next time, now that you’ve admitted that you’ve not attained your projections on your returns from trust investment.

Conclusion: The manager thanks X and Y for their report. He pleads with them to come back soonest to give solutions to their challenges.

END…