Case study #1 – Student Loans

 – page 25 of the textbook

Student Loans Sallie Mae is a publicly traded U.S. corporation that lends billions of dollars in student loans. Twenty-five percent of all student borrowers hold Sallie Mae loans. There are two types of student borrowers: (1) students who qualify for federally guaranteed loans—the students are responsible for the loan, and, if they default, the lender is guaranteed reimbursement; (2) students who do not qualify for federally guaranteed loans because they are high risk—the students are responsible for the loan, and, if they default, the lender loses the loan amount. Lenders such as Sallie Mae greatly prefer to issue federally guaranteed loans because it does not put them at financial risk.

One Sallie Mae marketing strategy is to provide some loans to students who don’t qualify for federally guaranteed loans as a way to build better relationships with schools. The rationale is that these schools are then more likely to direct students who do qualify for federally guaranteed loans to Sallie Mae.92 Even though Sallie Mae loses money on these “designed to fail” student loans, the financial losses are minimal compared with the large profits generated by the additional applications from students who do qualify for federally guaranteed loans.

Critical Thinking Questions

1. If you were a Sallie Mae loan officer, what would you do if you were directed by your boss to issue a high-risk loan to a student who, according to your calculations, has a 92 percent likelihood of default?

2. Issue the loan without highlighting the risks

3. Emphasize the negative consequences of defaulting and let the student decide

4. Refuse to issue the loan

5. Why is this the right option to choose?

6. What are the ethics underlying your decision?”

Case Study #2 – Dismissal and Promotion Politics

 – page 115 of the textbook

Dismissal and Promotion Politics After graduation, you obtain a job as an information technology (IT) support person with a small company. You and your boss, the IT manager, are the only two people in the department. The two of you get along well and enjoy working with each other.

After a year on the job, the company’s president and the chief operating officer (COO) invite you out to lunch. When you arrive at the restaurant, you notice that they seem to have made effort to make this meeting secretive; they chose a location far from work and arrived separately, both of which are out of the ordinary. During lunch, they tell you that they are really pleased with your work and want to offer you the position of IT manager, your boss’ position. You are initially shocked, and they explain that your boss is not meeting their expectations. They plan on firing him in a few weeks, after he completes a major project. They want to offer the job to you first and, if turned down, they will post the position after your boss is fired. They ask you to keep this knowledge confidential and want an answer within a week.

You feel both glad and sad about this opportunity. It’s great to be highly respected and offered the promotion. However, the timing couldn’t be worse for your boss because he and his wife recently had a child. Since your boss will be fired one way or the other, you accept the promotion. The president informs you that it’ll be another 3 weeks before the announcement is made.

Going to work knowing that your boss will be fired is incredibly stressful. Your boss believes his job is secure and mentions he is beginning a costly major home remodeling project.

Critical Thinking Questions

1. What would you do?

2. Break confidence and confidentially tell your boss about his upcoming dismissal

3. Don’t say

4. Something else (if so, what?)

5. Why is this the right option to choose?

6. What are the ethics underlying your decision?”

Case study #3 – Advice

 – page 175 of the textbook

After graduation, you obtain a job as a sales representative with a large advertising agency that negotiates media campaigns for corporate clients. Sales representatives travel to assigned markets and negotiate advertising opportunities with television sales managers. Sales representatives have specific media client guidelines specifying the television stations and programs from which commercial time may be purchased, along with a budget ceiling.

Sales representatives are assigned partners who provide moral support. Your region is Arizona, Nevada, and Utah. Claire, who has been the sales representative for California for about a year, is your partner. The two of you contact each other once a week for updates.

On a Monday evening, a distraught Claire calls you for advice. Earlier in the day, she met with KXYZ-TV’s new sales manager to negotiate media placement advertisements for Cadillac and Best Buy. The total market media dollar allocation for these two companies in the San Francisco market is $7 million dollars. KXYZ-TV historically has received 20 percent of the business.

Claire informs you that while meeting with KXYZ-TV’s new sales manager in his office, he made unwanted sexual advances toward her. Claire was shocked by his behavior, quickly ended the discussion, and left the building with a promise to return the next day to finish the sale.

“It was a really scuzzy experience,” Claire tells you. “I know our clients want to advertise on KXYZ-TV, but I don’t feel comfortable dealing with that guy.” You note that if she delayed the visit for a week, you could join her and do the sales call together. Claire rejects your offer and insists on handling this herself. Nonetheless, she seeks your advice on what to do next.

Critical Thinking Questions

1. What would you recommend?

2. Return, close the deal, and say nothing about the sexual harassment

3. Return, close the deal, and report the sexual harassment incident to her supervisor

4. Don’t return and report the sexual harassment incident to her supervisor

5. Something else (if so, what?)

6. Why is this the right option to choose?

7. What are the ethics underlying your decision?”