1.

1 Ethical Dillema Description

An ethical dilemma is typically describes as a complex situation that involves a conflict between
different moral ( Ask 2013). In the business world, there are many people facing ethical dilemma
situation from client, family, or even boss that make them think over their own rights.

I would like to present an ethical dilemma situation facing by a loan processing manager who
works in the loan department of a commercial bank. This loan processing manager faces an
unethical issue that concern with his bank manager, he knows that the applicant is not qualifies
for the loan without proper collateral violating the rules and regulations of the bank and
regulatory body, which is central bank of the nation. In the scenario and according to the business
nature, which is a financial institution, the loan processing manage has to face the ethical dilemma
situation and make the right decision whether to approve the loan or refuse the approval of the
loan

Both choices of approving and refusing the loan have their own benefits and drawbacks to the
loan processing manager. By approving the loan, the loan processing manager. By approving the
loan, the loan processing manager may gain benefits that will help him in his career and have
thrust from the bank manager but he will also have the drawback of making him unethical person
that never follow his rights and duty of his own profession. On the other hand, if he refuses the
loan, the loan processing manager will gain the advantage of being an ethical person to the society
and his bank and profession by following his rights or morality but it will also have the possibility
of losing his job if he does not follow the egoism of the bank manager.

1.2 Why is it an Ethical Dilemma

The situation describe above is definitely a business ethical dilemma because the bank manager
does not practice normative ethic theory in the business conduct. He practices consequentialism
ethic, which is doing the rightness of the action according to result. He does not practice
deontology ethic theory, which is doing the right action determined by the conformity of moral
rules. The bank manager is an egoist (The prescriptive doctrine that all persons ought to act from
their own self-interest (philosophy lander , 2001) because he thinks his decision is morally right if
it servers the interest of him. For the loan processing manager, it is a business ethical dilemma
because he has to uphold the business ethics and ensuring any loan transaction has to comply
with the standard practice of the bank and the regulation listed by the national financial regulatory
body,

Ethical dilemma presented above has two choices, which are to approve the loan or to refuse the
approval. The loan processing manger is facing the dilemma pf making the decision for this case.
Making a wrong decision has a big impact to the stakeholder (freeman, 1984) defines stakeholder
as any group or individual who can affect or is affected by the achievement of the organization
objective) Brennar & Cocharna 1991, ) ( marstein , 2003) of the bank, general interest of the public,
credibility of the bank and the ethics of his profession. Making the right decision would upload the
good name of the bank. Trust from stakeholder, upheld the ethic of his profession, and have
socially agreeable moral intensity particularly social consensus and probability effect parameters.

The choice of approving the loan may help him to gain a good image to his bank manger because
the bank manager will take him as good subordinate. The bank manager may give him better
annual compensation of helping him to do a good job by approving the loan or even offer him a
better position for helping him. This is a crystal clear unethical case specified by consequentialism
 of normative ethical theory. The normative ethic s is the attempt to provide a general theory that
tells us how we ought to live (Moral philosophy, 2009). The bank manage does not practice
deontology ethic theory (These prohibition constraint us in what we may do to any person ( not
just those close to us, even in pursuit of good ends( Espen Gamlund , 2010)) that specifying
rightness of action is determine by it conformity to moral rules. If the loan processing manager
approves the loan this time, he may face tis unethical practice repeatedly requested by the bank
manager because the bank manager has found him as a subordinate that can help him to continue
practicing utilitarian by taking advantage on him to approve future loan repeatedly.

When this unethical practice was tp be discovered by the independent auditor team or the loan
cannot be recovered after the lapse the re-payment period, he bank manager will put the blame
on the loan processing manager. The loan processing manager may be given a show cause letter
that subsequently lead him to be expelled by disciplinary board of the bank due to violating the
fundamental ethical value of trust stipulated by the rule and regulation of the bank and not
complying with the regulation laid down by the national regulation body.

On the other hand, if the loan processing manager goes against his ethical principle refusing to
approve the loan, the bank manger will be mad, look down, and resent him. The loan processing
may receive less loan applications to ice approves or become less important to the bank, and even
get demoted to lower position. The bank manager may backstab him when meeting with the chief
executive officer( CEO), or give ruthless comment such as insubordination on the loan process ing
manager. This can cause the loan processing manager to lose his job subsequently because the
bank manager would accuse him ( the loan processing manager) That his performance doe not
meet the key performance index given to him during the annual performance appraisal.

1.3 Ethical Solution

The unethical situation that the loan processing manger is facing now is from the bank manager.
The bank manger requests the loan processing manager to approve a loan of 1000,0000 punds
that have no collateral, no appropriate finanacial statement and unsure of financial ability to rte-
pay back the loan. In the situation, the loan processing manager feels that this is a dileema
situation for hime because the person that wanted him to approves the loan is his hnbank
manager,. As a loan processing manager, he kniows that morally it is nit right for him to involve in
unethical practice. He is a person that always follows the rules and regulation of the bank but this
unethcicla request make him uncomfortable and violating his fundamental right. Thus, iti s
becoming a dilemma situation to him. He thinks this situation as a dileema because it may change
his life after he make the choice. It may go smooth of getting favortism as he wanted from his
bank manager or get worst losing his job.

The appropriate decision to be made by the loan processing manager is to reject the request by
the bank manager in order to uphold the principle of normative ethical theory. He should reject
any form consequentialism ethic practice. He should advocate deonthology ethic practice i.e.
pratuice by moral value or even follow the Asian Way of ethic practice by religion values or
practice what is advocate by Crane and Matten (2010). Crane and matten (2010) states that ethic
should be absolute (applied in all time and place), relative (dependent on context ) pr puralr( which
seek a consensus between different ethical tradition)s.

He should report the case to the top management of the bank so that the bank manbagemehnt
can tajke necessary corrective ssaction to rectify this business ethical dilemma. Otherwise, it will
 definitely affect the good name, social trust of the socisty, and have socilally agrreable moral
intensity particuylary social consensus and probability effect parameters. Personal wise, the loan
processing manager can uphold the ethic of his profession and uphold the intergrity of financial
profession. If he does the following procedure, the loan processing manager doe not need to face
the dilemma that make him stress on the situation. There is always a better solution than involving
himself in a dilemma situation that is hard to face.

The impact on socity for this dilemma can be concluded by the six component of moral intensity.
Moral intensity is the extent to which a situation or an issue calls for ethical principle application
or the Explainz, n.d). Need to apply moral thoughts and principle diifer with the circumstances or
scenario( explainz, n.d) . Firstly magnitude of consequences ( jones, 1991, pg 374) is mostly score
abetween 8-10 points because this ethical dilemma situation is most likely to happen to anybody
in the society. Second social consensus ( jone 1991, pg 375) in theis dilemma is low because the
type of business ethical dilemma on the above is not acceptable by society, the stakeholder , and
the national regulatory body. Third the probability (Jones, 1991,pg 375) of teffect is also low
because the situation should be happening on a small scale and this irregularitity can be detected
by an annual aduit team. The temporal immediacy ( jones 1991 pg 376) will be high beaucse of
the loan is needed by the situation is laomost immediately and is being controlled by the bank
manager who hads great autonomous authority. Fifth, proximity (jones1991, pg 376) Is high
because the loan processing manager and bank manger are working collague, , one has the right
to approve and one with authority over the loan processing manager. Lastly concentration of
effect 9jone 1991,pg 377) mat be low idf the bank has many branches and it may happen in one
branches or a few and perhaps only a few percent happening due to doung favour for friend and
distinguished person. Thus , The overall moral intensity show that tis a low risk of massive
consequences that would affect a few of us in our location and society, but not happening
immediately.

2.0 Portfolio of Evidence Contents

2.1 Appendix A
The Ethical Leadership Debate
This is a reflective statement pertaining to the debate that involved four characters
who areMike Gustavsson, Jan Edwards, Mei-Hua Felung, and Deshi Chen. During the
debate session,there are people agreeing with each other and there are people
disagreeing. All four charactershave different believe and ethical theory can be applied
that use in the business world.
Mike is a business ethic lecturer who believes ethical behaviour of corporations is set
bythe behaviour of the top management of the organisation. If there are good ethical
people on thetop of the company that make good decisions then the company itself will
be ethical. Deontology ethic th eory is best representing Mikes character. He is a person
that bounded by his duty as a
lecturer. He understands his duties that it should be undertaken ethically. Mike made a
researchon a company that his daughter is interested in. It has a well-written corporate
ethics andgovernance codes, the company even used to make donation to several local
charities. After hisdaughter graduated from university, she went to work in that
company. Mike is happy at first butbecomes surprise when he notices that his daughter
has become a person that only seek for bonusand work tremendously long hours for the
company. Mike has overestimated his right believingthat the society is an ethical
society based on the research he has done.
Jan is the CEO of a company. The term feminist ethic is shown in her character. Jan is
awoman that looks after the company. She is a successful entrepreneur managing a
small business.She is morally successful in the way that she trusts herself. She even
motivates people of hercompany to be involved in charity. After recent years, she
becomes concerned about the newgraduates that only think of getting their way up in
the company by any means. She demonstratesfeminist ethic that she concerns about the
new graduates. Even though she is at the top ofmanagement, she still cares about the
people below her. She notices that new graduates needtheir own rights and justices,
and intelligence on their pathways to success but not aim to the topposition quickly.

Mei- Huas view presents the theory of utilitarianism. A consequence ethic of

rule utilitarianism has been shown by Mei-Hua. She does things by obeying the rule
whoseobservance would lead her to have a general better outcome. She believes that as
a professionalaccountant, there have strict codes of conduct and rules to be followed.
Mei-Hua is a person whoalways follows the rules and also trusts her fellow colleagues
that they are ethical and moral people who are being treated unfairly by the
management of the company. From Mei- Huas view, she is unaware that how ethical
some companies actually are. Mei- Huas right makes her believe
that strong ethical codes can lead to strong leadership. It will also lead to a better moral
andethical business in the society. Mei-Hua still believes in the society that ethic still
lives ineveryone and a day will come where everyone will work alongside each other
with ethics.
Deshi is a person who sees business ethic as a pointless subject. He thinks
ethicalleadership is about getting things done creating a profitable and successful
business. It showsthat Deshi is a person who makes judgments by egoism. Deshi is an
egoistic person that onlyfollows his right morally. He thinks that it is ridiculous for
someone to intentionally sign up the
ethnic codes which will stop people from making money. Deshis way of thinking is too
selfish.
He only thinks of his self-interest that ethics is pointless even though it will endanger
his degreecourse and ending with not getting his dream for a stable office job. An
egoistic person likeDeshi will bring great danger to his character for future endeavour
and society.