SUPPLEMENTAL CASE 2
Acme Title Pawn*
Joe reflected on his situation at Acme Title Pawn while mowing his lawn. He had been working there
for about a year, but was having ever-greater reservations about his job. During all of those years of
struggling to care for his family while planning for, attending, and ultimately graduating from college,
he never envisioned a career at a firm like Acme Title Pawn. He wrestled with the question of whether
to quit. His doubts about the business began by the end of his very first day at work and they had only
increased since then. As he went back into his house for a breath of cool air, he once again reviewed his
situation.
At the time he accepted the position he knew virtually nothing about the title pawn industry. He
believed this firm might offer him the possibility of increased responsibility, an advantage not offered
by many of his previous positions. Also, the pay was good compared to his previous positions. Six
months after beginning his employment with Acme, he graduated with a degree in accounting. It had
been a struggle, but Joe hoped that soon there would be a payoff. Now he found himself wondering: “is
this it?”
When a customer needed a loan, Acme would lend money, holding the title of the individual’s
automobile as collateral. The maximum amount Acme would lend was usually 50 percent of the car’s
book value. The customer was allowed to keep driving the car as long as the specified payments were
made. The standard loan was for one month with an interest rate of 25 percent compounded monthly.
Therefore, if a customer borrowed $1,000 on the car, $1,250 would be due at the end of the month or
the car would be seized and sold at auction to satisfy the debt. Occasionally, Acme would extend the
Supplemental Case 2: Acme Title Pawn 195
credit for several more months as long as the interest was paid every month. A customer borrowing
$1,000 for a four-month period would have paid $1,000 in interest and still owe the $1,000 principal at
the end of the fourth month. At that time, or at the end of any month when the principal remained
unpaid, the vehicle could be seized.
Joe soon learned that the company occasionally did not return this excess to the debtor. If the debtor
called and asked about it, a check would be sent. If the debtor did not ask, the company often did not
send the check. It seemed to Joe that the decision whether or not to send the check was based on the
likelihood of a complaint being made by the debtor.
The company targeted minority groups, locating offices in poorer neighborhoods in most cities in
which they did business. In Florida, Acme’s business was highly visible in Hispanic neighborhoods.
The company directed its marketing efforts toward gamblers in areas likely to have down-on-their-luck
gamblers, such as Nevada and the Mississippi Gulf Coast. The company presently operated in twelve
states. If a state in which Acme was operating lowered the legal interest rate that could be charged to
less than 25 percent per month, Acme stopped doing business in that state. Acme suspended operations
in North Carolina and Kentucky for this reason.
It appeared to Joe that the company did not attract very high-class personnel for any positions. Joe
thought the employees at the home office where he worked did not seem to be of a much higher caliber
than those employed at the branches. Once he had commented to his supervisor on what he perceived to
be a lack of professionalism on the part of his coworkers. The Accounting Manager’s response was,
“Of course, if there were not something wrong with each one of us, why would we work here?” Joe
196 Supplemental Case 2: Acme Title Pawn
As Joe thought more about his situation, he concluded that he could sum up most of his reservations
about working at Acme with a single sentence. It seemed that he was working for a sleazy company in a
sleazy business surrounded by sleazy individuals.
Joe also thought he had to consider the well being of his family in any decision he made. He would not
find it easy to secure another good position his town, as it was small and isolated. Joe and his family
were now living about 1,000 miles from their relatives. He had accepted a transfer to his present
location, Grovetown, when he was working for Ace Printing. The layoff caused by downsizing had left
Joe and his family stranded in Grovetown. The proximity of a university offering a night program in
accounting coupled with his wife’s position as a clerk in the business office of a local physician’s group
had led to the decision to stay. Now his two older children were very active in their schools and with
extracurricular activities. They had many friends, and Joe believed the children would suffer a difficult
adjustment period if they were to leave Grovetown at this time. His wife, too, seemed content with life
as it was. She had found satisfaction in her job, as well as with the community.
Even Acme’s home office seemed to be fraught with problems, most of which Joe thought were caused
by the caliber of Acme’s personnel. In the year that Joe had been there, he had seen a number of
employees go over their supervisors’ heads taking problems to higher levels than necessary and
undermining the authority of their supervisors. This seemed to be an accepted way of solving problems
and making decisions. There also seemed to be a degree of backstabbing with which Joe was unfamiliar
QUESTIONS FOR DISCUSSION
1. What decisions need to be made when an individual discovers that he/she is working in a company
and industry with many ethical issues?
2. If the organizational culture at Acme Title Pawn cannot be changed, can Joe continue to work there
and avoid involvement in activities that are ethically questionable or possibly illegal?
Supplemental Case 2: Acme Title Pawn 197
3. How could Acme create an ethical organizational culture and still be in the title pawn business?
ANSWERS TO QUESTIONS FOR DISCUSSION
1. This case should encourage the class to develop a rich discussion about the decisions and
involvement of an individual in an ethically questionable company and industry. Joe has to
2. Joe must make a personal decision as to whether he can stay out of trouble and feel good about
himself if he continues to work at Acme. If he stays, it is possible he could be a positive force to
encourage others to comply with the law and develop more ethical treatment of customers.
However, if Joe stays, he will face much ethical conflict. There is a possibility that his career
advancement may suffer if he becomes overly focused on unethical behavior within the company.
3. Acme could develop an ethical compliance program to make sure that consumers and employees
are treated properly. But the nature of the industry and competition might prevent Acme from