Read the Ethical Dilemma,"Who Has the Money - The Democrat or The Republican?"andshare your thoughts by answering the following ethical questions also posed at the end of the story.

What should Sheli do? What would you do if you were in Sheli's position?When answering the questions elaborate, expand upon, and support your thoughts.

WHO HAS THE MONEY - THE DEMOCRAT OR THE REPUBLICAN?

Sunflower Manufacturing recently applied for a $10 million loan at The Democrat Federal Bank (known simply as The Democrat).The purpose of the loan is to support its working capital needs (short-term funds) during the next nine months.Sunflower has been a loyal customer of the bank for many years and has been extended whatever amount of credit it requested in the past.

Sheli Crocker, who is a new, young loan officer at The Democrat, reviewed Sunflower's loan application and decided to turn down the loan for the requested amount.In her report to Henry, her boss and the senior loan officer, Sheli indicated that she thought Sunflower would have trouble repaying a $10 million loan because its financial positions has deteriorated in recent months.Sheli noted that the company's ability to pay its current obligation - that is, its liquidity position - is poor and that analysts are pessimistic about Sunflower's ability to improve its liquidity during the next two years.As a result, Sheli recommended that Sunflower's request for $10 million should be denied.She did indicate, however, that she thought it would be appropriate for the bank to lend a smaller amount, up to a maximum of $2 million.

Earlier today, Henry called Sheli into his office to discuss her report because he wanted her to reconsider her recommendation.Henry told Sheli that he thought the bank should extend the $10 million loan to Sunflower because the company has been a model customer in the past, and the bank should not abandon a loyal customer just because it might have some short-term financial difficulties.Sheli explained that Sunflower's financial numbers indicate that the firm can handle only a $2 million loan.In addition, she said that the cash budget that was provided with the loan application was "suspicious" because the numbers didn't seem to match Sunflower's other financial statements and recent activity in the company's bank accounts.

Henry instructed Sheli to return to her office and reevaluate Sunflower's loan application.He suggested that Sheli should consider the loyalty the company has shown to the bank over the years.In fact, Henry told Sheli that he believed customer loyalty should be the primary consideration when determining to whom the bank should lend money.Further, Henry indicated that he thought Sunflower would go to another bank, perhaps to its archrival, The Republican NationalBank (affectionately known as The Republican), for the loan unless The Democrat approved a loan for the entire $10 million that was requested.And, if a competing bank granted Sunflower the loan, The Democrat probably would lose all of the company's business, including its checking account, payroll management, and receivables management.

After reconsidering the financial numbers, Sheli did not change her mind.In fact, she was even more convinced that the loan should not be made because both Sunflower's financial position and it's ability to generate the necessary cash flows in recent months suggest that the bank would be making a big mistake if the loan were granted.but, because it was the end of the accounting period and Sheli knew that her department had not generated its quota of loans, she was trying to determine what actions she might be able to take to make the loan application more attractive.In the back of her mind, she couldn't forget her earlier discussion with Henry in which he reminded her of the importance of meeting loan quotas; he suggested that jobs could be lost if quotas weren't attained.

Another factor that Sheli has to consider is that The Democrat was in a somewhat precarious financial position itself.The Democrat had been losing business to competing banks, especially to The Republican, during the past few years.The loss of business had caused a significant decline in The Democrat's growth.What should Sheli do?What would you do if you were in Sheli's position?