Ethics Assignment
Read the short case and use the attached Ethics reading to answer the following questions:
1. What is the ethical issue? Provide a detailed explanation.
2. Who are the stakeholders involved in this issue?
3. Is the decision right? Is it fair?
4. What are the consequences of the ideas proposed (long term and short term)?
5. What are the obligations involved and the reasons for each one?
6. Think about yourself a person of integrity? What would a person of integrity do in this situation?
Be sure to use the reading material to successfully complete the questions and the material from class:
• Is it right? Deontological theory of ethics – universally accepted guidelines of right and wrong
• Is it fair? Deontological theory of justice – actions are just or unjust
• Who gets hurt? Utilitarian – Consequentialist – do the greatest good for the greatest number of people
• Would you be comfortable if the details of your decision were made public? Universalist principle of disclosure- Integrity (virtue ethics)
• How does it smell? – Check Your Gut (intuition)
Salary Advance United Ponders Its Future
Max is the CEO of Salary Advance United, a payday lender with twenty-five locations. The core business of Salary Advance is to lend consumers advances of between $100 and $500 against their paycheck for short periods of time, usually about one week to ten days. Salary Advance also offers other financial services such as check cashing and wiring money. Similar to other payday lenders, Urban charges approximately $15 for a 2-week loan to their borrowers who tend to be high risk. If the loan interest were calculated on an annual basis, the rate would be 390 percent. Some states, including New York, cap interest rates at 16 percent for loans, even though store credit cards often charge over 20 percent for their loans. (Both 16 and 20 refer to annual rates.)
Max informs his management team during a meeting quite that he, along with them, is worried about the future of the business. He notes that fifteen states have already banned payday loans, and that more and more politicians are condemning the business, including the president of the United States. He reminds the team that some of the accusations against the industry are preposterous. His biggest concern right now is that the state is going to shut them down.
Max then had a problem-solving session with the group, exploring alternatives that could be pursued to stay in business. One alternative that emerged was to set up online operations overseas in a country that welcomed such businesses. The suggestion was to still keep a few offices open to catch street traffic and offer services for wiring money. In this way, state regulations could be avoided.
Max concluded the meeting by saying, “We cannot forget that our mission is to help financially troubled people in need. Without our loans, many of our potential customers would have their cars repossessed or their homes foreclosed. Equally bad, they would have to use loan sharks to get money. Our interest rates may seem high to the outside world, but we have to charge enough to cover our risks and earn a small profit.”
The team nodded in agreement with Max.
Questions:
1. What is the ethical issue? Provide a detailed explanation.
2. Who are the stakeholders involved in this issue?
3. Is the solution right? Is it fair?
4. What are the consequences of the ideas proposed (long term and short term)?
5. What are the obligations involved and the reasons for each one?
6. Think about yourself a person of integrity? What would a person of integrity do in this situation?
