9ed Comprehensive Case #2: An Ethics Role Playing Case. Handouts to accompany Teaching Note. See
end of accompanying TN for instructions and sequence. NOTE: FOR EACH HANDOUT, print out a
separate sheet.
Handout III (Version 1)—Result of Decision 1 and New Decision 2
Your Decision 1 was (a)
Continue operations and try to cut costs within six months.
Your days are extremely busy as you try to find appropriate ways to cut costs. Wages of all employees,
including yourself, have been halved, no one is happy, and morale is very low, but most people seem to
About three months into your trial period, a local government official, Abuwahr Sahib, approaches you
and offers to buy the company. You realize that there is a great deal of uncertainty about the future
cash flows the company will produce—can the company can restore its profitability to its former levels,
or are the current cash flow levels permanent? The value assigned to the firm is very sensitive to
whether optimistic or pessimistic assumptions about the future are used. Nevertheless, Sahib’s offer
Decision 2
Part A:
Does this decision involve ethics or is it a business decision? Please explain.
Part B:
The decision is up to you. What do you do? Please circle (c) or (d1).
(c) Recommend that the company sell to Sahib
Handout III (Version 2)—Result of Decision 1 and New Decision 2
Your Decision 1 was (b)
shut down
.
Upon your return you announce that AHF will be closing sometime in the next three to nine months. You
indicate that you will try to keep as many people employed as long as possible, but you are not sure how
long that will be. You begin to look for buyers of specific assets or of the company as a whole. You
desperately hope that a local buyer may be found, but you know that is unlikely. No one is happy, least
of all you and your spouse, and morale is at an all-time low. Many of your extended family are
particularly upset and have been asking your spouse to influence you to do more to help them. Your
relationships with government officials have also cooled dramatically. You are not yet sure why.
Decision 2
Part A:
Does this decision involve ethics or is it a business decision? Please explain.
Part B:
The decision is up to you. What do you do? Please circle (c) or (d2).
(c) Recommend that the company sell to Sahib.
Students should receive the appropriate version of Handout IV based on their previous decision, as
indicated in each version on the following pages.
Handout IV (Version 1)—Result of Decision 2 and New Decision 3
Your Decision 2 was (c)
recommend that the company sell.
USHF agrees and the deal is consummated. You stay on as manager of the new company, Sahib Shoes,
but you now handle the business end, trying to learn finance and foreign exchange management, while
Sahib has appointed his own man to run the day-to-day operations. Soon you learn through your family
in their deal with USHF and threatens to make your role public. What do you do? Do you quit?
Decision 3
Part A:
Does this decision involve ethics or is it a business decision? Please explain.
Part B:
The decision is up to you. What do you do? Please circle either (e) or (f).
Handout IV (Version 2)—Result of Decision 2 and new Decision 3
Your Decision 2 was (d1)
Don’t sell. Keep going as planned, cutting costs.
You suddenly find your firm faced with supply problems, additional taxes on transactions, and surprise
government inspections that disrupt work. Sadly, you realize that trying to continue operations isn’t
going to work, and you notify the Seattle office that you are agreeing to shut down AHF as soon as
possible and you will concentrate on finding buyers for the firm’s assets. Landon is not surprised, and he
You stay on as a manager in the new company, Sahib Shoes, but your job now is to train Sahib and try to
learn finance, marketing, and foreign exchange management, while Sahib has appointed his own man to
run the day-to-day operations. Soon you learn through your family connections that Sahib has begun
using both child and prison labor and finding excuses to fire the original workers. None of your family
employment. What do you do? Do you quit?
Decision 3
Part A:
Does this decision involve ethics or is it a business decision? Please explain.
Part B:
The decision is up to you. What do you do? Please circle either (e) or (f).
Handout IV (Version 3)—Result of Decision 2 and New Decision 3
Your Decision 2 was (d2)
Keep going with planned shutdown.
Landon calls and tells you that they have found a buyer, some local named something-or-other “Sahib”.
Sahib is willing to do a deal where he would make a large down payment today, sufficient to meet
USHF’s immediate cash flow needs, and make another large payment in one year if USHF will provide
low cost supplies for the first year, and if Sahib can retain you as a paid consultant to teach him how to
employment. What do you do? Do you quit?
Decision 3
Part A:
Does this decision involve ethics or is it a business decision? Please explain.
Part B:
The decision is up to you. What do you do? Please circle (e) or (f).
Students should receive the appropriate version of Handout V based on their previous three choices,
as indicated in each version.
Handout V (Version 1)—Final Results
Decision 1: (a)
Continue operations and try to cut costs within six months.
Decision 2: (c)
Recommend
that the company sell to Sahib.
Decision 3: (e)
Quit and go to the government.
As a result of your actions, an investigation into Sahib’s affairs is begun, but it progresses slowly, and no
action is taken by the government. One by one, your family members are fired from the company, and
Handout V (Version 2)—Final Results
Decision 1: (a)
Continue operations and try to cut costs within six months.
Decision 2: (c)
Recommend
the company sell to Sahib.
Decision 3: (f)
Protect your family by continuing to work.
An investigation into Sahib’s affairs is begun, but it progresses slowly, and no action is taken by the
Handout V (Version 3)—Final Results
Decision 1: (a)
Continue operations and try to cut costs within six months.
Decision 2: (d1), (d2)
Keep
going as planned and refuse to sell the company to Sahib.
Decision 3: (e)
Quit and go to the government.
A consortium of buyers headed up by Sook Whang, an old Asia hand and longtime friend of George
Landon, approaches you about purchasing AHF. Whang indicates their desire to purchase the company
and keep it running in Sri Lanka. Although you would not be the new company’s manager, they wish to
retain your services as a consultant, utilizing your business experience and extensive contacts. He states
Handout V (Version 4)—Final Results
Decision 1: (a)
Continue operations and try to cut costs within six months.
Decision 2: (b1), (b2)
Keep
going as planned and refuse to sell the company to Sahib.
Decision 3: (f)
Protect your family by
continuing to work.
An investigation into Sahib’s affairs is eventually begun as increasing pressure instigated by U.S. and
U.N. human rights groups forces the authorities to act. Suddenly, without warning, you and Sahib are
arrested for human rights violations. After a quick trial, you and Sahib are both sentenced to ten years
Handout V (Version 5)—Final Results
Decision 1: (b)
Shut down.
Decision 2: (c)
Recommend that the company sell to Sahib.
Decision 3: (e)
Quit and go to the government.
As a result of your actions, an investigation into Sahib’s affairs is begun, but it progresses slowly, and no
action is taken by the government. One by one your family members are fired from the company and
they have tremendous difficulty in finding other employment. You and your spouse have lost face in
Handout V (Version 6)—Final Results
Decision 1: (b)
Shut down.
Decision 2: (c)
Recommend that the company sell to Sahib.
Decision 3: (f)
Protect your family by continuing to work.
An investigation into Sahib’s affairs is begun, but it progresses slowly, and no action is taken by the
government until U.S. pressure eventually forces the authorities to act. Suddenly, without warning, you
and Sahib are arrested for human rights violations. After a quick trial, you and Sahib are both sentenced
Handout V (Version 7)—Final Results
Decision 1: (b)
Shut down.
Decision 2: (d1), (d2)
Keep going as planned and refuse to sell the company to
Sahib.
Decision 3: (e)
Quit and go to the government.
A consortium of buyers headed up by Sook Whang, an old Asia hand and longtime friend of George
Landon, approaches you about purchasing AHF. Whang indicates their desire to purchase the company
and keep it running in Sri Lanka. Although you would not be the new company’s manager, they wish to
retain your services as a consultant, utilizing your business experience and extensive contacts. He states
that he hopes he can look forward to working with you for a long time to come. Whang indicates his
Handout V (Version 8)—Final Results
Decision 1: (b)
Shut down
. Decision 2: (d1), (d2)
Keep going as planned and refuse to sell the company to
Sahib.
Decision 3: (f)
Protect your family by continuing to work.
An investigation into Sahib’s affairs is eventually begun as increasing pressure instigated by U.S. and
U.N. human rights groups forces the authorities to act. Suddenly, without warning, you and Sahib are
arrested for human rights violations. After a quick trial, you and Sahib are both sentenced to ten years
Practical Ethics Shareholder-Stakeholder Feedback Form
Name: ________________________________________
1. What was the one most important point you learned from the case exercise?
2. What aspect(s) of the case did you like? Why?