Use the weight-of-reasons framework to figure out what you would do in the following instances. As you do so, apply the lessons from this chapter. Identify the social influences on your decision, and in identifying possible provide him with appropriate remuneration for his efforts. The so-called irregularities do not exist, as we both know. courses of action, consider whether you should exercise voice, blow the whistle, or exit (where they are applicable). If you choose voice, consider the political tactics needed to "close the circle." The past year had not been good for appliance companies. The industry was in a tailspin-too many Case 4.1: Ethical Dilemma at High Value Discount Appliances competitors and insufficient profits. Most investors thought that HV would weather the storm; however, Brian Bagley, an analyst from an obscure brokerage, had started to question why the company The High Value (HV) chain of discount appliance stores, started in 1988 with the merger of three smaller chains, continued to be successful. He thought HV had opened too many stores and that many of them would achieved sales in excess of $28 billion under the respected leadership of its CEO, John Sutherland. Investors not be profitable. "The numbers," Bagley claimed, "do not add up." Sutherland was furious whenever he included major banks, insurance companies, real estate developers, and investment banking houses. HV was touted by the media as one of the most outstanding companies in the United States. It was especially praised for heard Bagley's name. "A nobody who did not know what he was talking about" is what Sutherland said its culture, which has been described as being "fresh, dynamic, and exciting." Fortune chose HV as one of the 10 of Bagley. Bagley's analysis led other analysts to start questioning HV's finances. Yet year after year, best companies to work for in the United States. HV's reported profits never seemed to falter. Sutherland earned one substantial bonus after another and was able to cash in on large stock options worth millions. John Sutherland came from a prominent U.S. family and was a pillar of society. An active supporter of many prominent causes, he was considered one of the most influential and respected U.S. philanthropists and a patron The Ski Bowling league, on the other hand, was having difficulties. It was not taking off in the United of the arts. He was also a major contributor to political parties and part-owner of two professional sport States. Sutherland had regularly dipped into his personal fortune to provide the league with infusions of franchises, the Dallas Ravens (in basketball) and the Miami Bulldogs (in football). A star ski bowler in his college cash . Your future was tied to the USSBA. You feared that if it was going nowhere, the same was true of years at Dartmouth, Sutherland had devoted considerable time to making it a national sport in the United States. you. Attendance was down, and most teams were near bankruptcy. Without more money, the league In 1989, he founded the U.S. Ski Bowling Association (USSBA), which now has eight teams. As USSBA's main might fold. Sutherland had been on the telephone for days trying to persuade his wealthy friends to give corporate sponsor, HV attached its name to nearly all the league's activities. HV's brand and the USSBA were more money, but they saw the league as a losing proposition and refused to help. They saw no reason to nearly indistinguishable. prop it up and keep it going. In 2001, you had the chance to meet Sutherland at a ski bowling match. You too had been a star ski bowler in After your tennis match with Sutherland, you found him in an uncharacteristically bad mood. He sadly college and had even been a good professional player before tearing your ankle tendons in a career-ending injury. said, Although nearly 20 years his junior, you immediately developed a rapport with Sutherland. It so happened that your wife's cousin was a close associate of Sutherland's and an investor in a number of Sutherland's businesses. There is not much more I can do. My bonus and stock options this coming year will be nowhere near In 2005, you ran into Sutherland again. He invited you to play golf and tennis and go boating with him near his what they were in the past . From now on High Value will have to start playing it much closer to the vest. home in Long Island. After a game of tennis, Sutherland asked whether you would like to join HV Discount I don't want the league to fold , but I have sunk as much cash as I can into it . We both know , though, that Appliances as his personal assistant. "Why don't you come and work for me?" He offered you a generous salary, we could temporarily borrow $500 to 600 million from the company and no one would have to know . which was important to you because you had a spouse and two young children to support. You like not only What do you think? Sutherland but also the group of young, athletic, and talented men and women whom Sutherland gathered around him. You fit right in with this crowd of hard-working, fun-loving people. In contrast, you were bored stiff with your What do you make of Sutherland's remarks? Use the weight-of-reasons framework to decide how you current banking job, and your career there was going nowhere. The bank had never felt like home. The decision should address the ethical dilemma you face. In doing so, consider not just what is right but also how was not difficult: You accepted Sutherland's offer. you can use political tactics to close the circle. What will you say to Sutherland, and what will you then do? After starting work at HV, you were assigned your portfolio of duties as Sutherland's assistant. One was quite unique and perfectly suited to you: You were to be the company's liaison to U.S. ski bowling. In this position, you Case 4.2: Polishing an Image were able to capitalize on the fact that many customers recalled your college and professional ski bowling exploits You have just received your MBA and for the past year and a half, you have worked as a financial On July 4, 2014, after a tennis game with Sutherland at his estate, he asked you to pick up some files from his accountant for a company that is conducting talks about a proposed merger with another firm. A office and then bring them to him. While in Sutherland's office, you accidentally dropped the files and scattered director of the company approaches you to enlist your support in "polishing the company's image" for their contents across the floor. On picking them up, you inadvertently saw a memo from Sutherland to the the upcoming merger talks. She asks for "some terrific forecasts of industry growth and market share" company's CFO, with whom you had become close through your work. The memo read, to give her "some leverage" in the talk. She says, "Be a good team player and do what I say, and it will all There are no irregularities in the statements of inventory or accounts receivable, as Gomez alleges. These are work out for the best." You are not naive. You know that the figures you choose as the basis for the judgment calls, as we all know. There is no reason to be conservative in making these calls and to make it appear forecasts and the approach and techniques you employ can influence the results. On the one hand, you as if our profits are any less than they are. You realize as well as I that every year we are subject to an independent could massage the data to paint a fairly rosy picture of the company's future. On the other hand, you audit by the respected firm of McDuffey and Spather, How can we fool such experienced auditors into believing could analyze the data to show pitfalls ahead and the prospects of rough going. While accounting that our inventory and accounts receivable are less than reported? Explain the situation to Gomez, thank him for standards exist for all accountants, the interpretation of how those standards apply varies. The rules his diligence, transfer him to a part of the company where he no longer can be concerned with these matters, and applying to the numbers a person brings to the table in merger talks seem to give you substantial