Confidential Advice to Charles Mark Re: Penasco Pension Issue

From the desk of Wendy Harper

Confidential advice to Charles Mark re: Penasco Pension Issue

November 17, 2010

Charles - As promised in our telephone conversastion on 15 November, I am providing you with my views on PENCASCO's pension crisis. This memo included the background research taht I conducted in advance of our conversaston, and at the end details what I believe the company should do to over come of the shortfalls described.

1. Why did John Smith mis-sell the endowment policies? What are thjt range of possible reasons or motivations that resulted in John's unethical sales activities?

LaCroix (1949) provides a useful model to us for evaluating the ethical pressures of middle managers. In his work, he outlines three types of pressurs

1. Pressure from business superiors to perform and sometimes to act questionably:

2. Pressure from family related obligations to provide for their loved ones and to overcome conflicts between work and home pressures; and

3. Pressures from internal competiotion where sussess is measured by results.

I have no issue with your approach to management whereby you expect results. Results are the cornerstone of any sales organisation. While some may construe pressure to perform as tacit approval to act unethically, I disagree.

John could be facing a personal crisis. A member of his family could be ill or they could be in financial trouble. Whiole this would not excuse his behaviour, it would help to explain it.

In my estimation, I believe La Croix's third pressure of internal competition sheds the best light on the subject.

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