Ethical Dilemma Tom Holland, an accounting and finance graduate in Melbourne, joined a top insurance firm in the city and has just started to settle into his role after a welcoming induction and a strong mentoring program. Tom has already secured some big clients and finds his work empowering with great potential for professional development and growth. Tom has been mentored by the chief executive, Paul Davidson, and they have formed a collegial professional relationship in a short time. In working through the accounts and records, Tom has discovered a range of significant and material costs arbitrarily allocated as other expenses and in some instances even as charitable donations. In looking through the receipts and records in more detail, Tom discovered these expenses covered a range of costs that utilised the contributions made by the insurance members. These included things such as entertaining guests at the sports events and lavish dinners for staff at five star restaurants. In casual discussions with colleagues, Holland has learned that these costs are quite routine and normal, and in fact are appreciated by the staff as these events and dinners serve as networking opportunities and also help to boost staff morale. However, as per regulations and the insurance firm's own policies, the manner in which these costs have been categorised and disclosed is not very consistent with the firm's policies in place, nor consistent with the government regulations the firm is legally obligated to comply with. Tom also learned recently of Paul Davidson, the chief executive, giving sport event tickets to family and friends, and has even used his corporate credit card to accumulate airline frequent flyer points that are then used by the executive staff and their respective family members. Based on his observations, Tom has found that Paul Davidson very openly discusses and promotes these activities and expenditures, even claiming that they are normal part of business and networking. Paul even went as far as to say that such activities were necessary to help the insurance firm maintain its competitive edge and build a collegial reputation in the financial services sector. From Paul's point of view, using members' contributions to fund such activities is crucial to establishing and maintaining lasting professional relationships and attract more customers. Based on his education and induction training, Tom is of the view that these activities and expenditures are not a beneficial use of members' money, and in recent times these have resulted in extra fees being passed to members. The general view of the firm culture, however, is that these activities and expenditures are seen as marketing and promotion activities, all with the purpose of helping the firm thrive in in a competitive landscape. Tom is working hard, becoming a rising star and has fostered wonderful personal relationships with his colleagues, especially his mentor Paul. And at the year end, he also enjoys the dinner in the five star restaurant paid by the contributions. Paul has placed a lot of confidence on Tom to take part in the networking efforts, but as outlined earlier, Tom gradually discovers the controversial misclassification of costs and how the source of payments come from the members' contributions. Catching up with former university colleagues who have also been employed at rival insurance and financial service firms, Tom has realised that these activities appear to be common everywhere. Based on his training and education, especially with regards to the ethical codes of conduct, he made a commitment to as a professional. Tom Holland feels he needs to fully consider the situation and context. Tom needs to determine if there is something he has to do the situation, or whether there is some rationalisation of the situation. Tom feels conflicted as, depending on the choice he makes, he may lose a good mentor and friend in Paul, derail a rising career, or even may face some regulatory and legal consequences. If Tom were to take some action to bring these issues to light and it turns out that the behaviour of the firm is in fact against policies and regulation, then there is a risk of the firm losing the contracts and this may jeopardise the survivorship of the business. In the worst case, it may lead to the risks of bankruptcy or laying off some employees, most of who are Tom's good friends and they may encounter personal financial problems as a result. It may not be the members' best interests to see the insurance firm closed, as the members may need to switch to another insurance firm and the new one may lack of the knowledge about their needs. Using an ethical decision making model of your choice with justification, resolve the ethical dilemmas outlined in the case above where you must take the perspective of Tom Holland.

In responding to the case you must do the following:

Question:

step1 What are facts of the case

Step 2 list primary stakeholders and define ethical issues

step 3 What are the the norms, principles and values related to case.(Take from APES 110 and FASEA)

Step4 What are alternative courses of action?

Step5 What is the best course of action that is consistent with the norms, Principles and values indentified in step 3?

Step6 What are the consequences of each possible course of action?

Step7 What is the decision?

Please answer this in steps.