Governance, Business
Ethics, Risk
Management and
Internal Control
Submitted by: Jesica Vargas
BSA II-12
ETHICAL DILEMMA
David Lawyer, sets up a small loan company specializing
in loans to business executives and small companies.
David does not spend much time in the business because
he spends full time with his law practice. No employees of
David Law firm are involved in the small loan company.
Identify and discuss the ethical implications of David's act.
DAVID
LAWYER’S
ETHICAL DILEMMA SIX STEP APPROACH
TO SOLVE
ETHICAL
DILEMMA
Relevant facts
• David Lawyer has a separate work besides the small
loan company that he put up.
• David is not that committed with small loan company
because he is busy with his law related works.
• his law firm’s employees is not involved in the
small loan company thus, both are separate.
Ethical Issue
• Is it ethical for David to start another company
without investing pre-emptive commitment and care
for it?
• Is it ethical for David to continue his small loan
company knowing that he knows that conflicts might
arise between the law firm and the business?
Who is Affected and How
is each Affected?
WHO HOW
DAVID LAWYER • Full commitment to work might be affected
• Reputation will be affected
• Might get losses for poor PaY
• Work Performance might be affected
• Attitude AND TREATMENT towards the firm
may be affected
Employees in the Loan Company • LESS WORK SUPERVISION
• LaCKS ENCOURAGEMENT ON MAXIMING
WORK CAPACITY
• Less incentive to work hard
Loan Company • POOR MANAGEMENT
• MIGHT BE DECLARED BANKRUPT OR CLOSED
David’s Available Alternatives
• Divide equal time in working for the two companies.
• Assign a person to full-time manage the loan company
on his behalf.
• Stop the operation of the small loan company.
Consequences of each
Alternatives
1. Divide equal time in working for 2. Assign a person to full-time manage
the two companies. the loan company on his behalf.
• David will have to cut his time • HE WILL BE Focused on his law firm.
in working in his law so he • He may not be always involved in the
could also work in the decision making of the management.
company. • Conflicts might arise against the
• Both companies will have person assigned.
supervision of the owner which • The loan company will be fully
necessary in management. supervised or managed.
Consequences of each
Alternatives
3. Stop the operation of the small
loan company
• David WILL HAVE NO CHOICE
BUT TO LET GO Of THE SMALL
LOAN COMPANY TO AVOID
POSSIBLE CONLICTS AND
fURTHER ETHICAL DILEMMAS.
DAVID LAWYER IS THE ONLY ONE WHO CAN DECIDE Of THE
APPRORIATE SOLUTION TO HIS ETHICAL DILEMMA SINCE IT IS HIS
ETHICAL VALUES THAT WILL DIRECT HIM TO WHAT IS THE BEST
THING TO DO.
APPROPRIATE MOSTY LIKELY, DAVID WILL CHOOSE TO STILL PURSUE BOTH AND
ACTION DIVIDE HIS TIME TO MANAGE THE fIRM AND THE BUSINESS. BUT If
DAVID KNOWS THAT CONfLICT IS HIGHLY PROBABLE TO ARISE
BETWEEN THE TWO AND HE STILL PURSUED IT, WE CAN CONCLUDE
THAT HE MAY BE AN UNETHICAL PERSON.
ON THE OTHER HAND, If HE DECIDED TO STOP THE OPERATION Of
HIS NEWLY PUT UP BUSINESS, WE CAN CONCLUDE THAT HE IS
TO DAVID’S ETHICAL AfRAID TO TAKE RISK AND WILL ONLY GO IN HIS Comfort ZONE TO
PREVENT POSSIBLE LOSSES. WHICH IS SOMEHOW ETHICAL.
DILEMMA REGARDLESS Of THE AVAILABLE OPTIONS , DAVID’S ETHICAL
VALUES AND BELIEfS WILL PREVAIL AND GUIDE HIM TO WEIGHT THE
PROS AND CONS Of EACH DECISION.
