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.
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
* This case was prepared by Roland B. Cousins, LaGrange College, and edited by Jennifer Jackson for
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.
The business of repossession can get ugly, so subcontractors were employed to perform that service in
each city in which Acme maintained an office. State laws generally required that the debtor be paid the
difference between the amount owed and the proceeds from the sale of the vehicle, minus any expenses
incurred. Acme paid the repossessor an average of $100, a locksmith was typically paid $25, and the
clean-up and sale of the vehicle at auction usually cost Acme about $75 to $100. Sometimes a
transportation charge was assessed depending on the distance from the seizure location to the
auctioneer.
Acme had many difficulties in the field, as one would expect, considering the nature of the business.
There had been a number of armed robberies at Acme locations even though very little cash was kept
on the premises. Advertising that stressed “cash for your title” might have misled would-be armed
robbers, the company had toyed with the idea of emphasizing payment by check instead of cash in their
ads—especially billboards—to discourage robbers. Acme had also been plagued with very high
employee turnover in most branches. Occasionally, an incident of embezzlement was uncovered at a
branch. No one at the home office seemed especially surprised when such activity was uncovered.
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 still believed that he would acquire responsibilities sooner at Acme than at most other firms because
of the high turnover in his department. He thought it possible that he could be promoted to the
controller’s position within five or six years if he continued to work as he had. Management seemed
very pleased with his performance. Joe wondered, though, if his association with this firm and industry
might lessen other job prospects if he stayed on. He was also concerned that his resume might portray a
“job hopper.” For years he had rarely stayed longer than one year with any employer. He was
concerned that leaving Acme at this time would give future prospective employers additional reason to
question his stability. Several more years at Acme would strengthen his resume both in terms of the
higher-level responsibilities he could claim and the added stability that would be implied by a longer
term of employment.
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
in other positions. Additionally, there had been recurring incidents of executives charging personal
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?
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
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