Case Study Benefit-Bank

Case Study: Benefit Bank

A case study involving two homebuilders, a bank, and an interests-based organization sheds light on the complex nature of ethical behavior and the dangers of entering into agreements or partnerships that pose a conflict of interest. The case is a reminder that it is imperative people and businesses examine the practices of those they align with before making agreements that could negatively affect stakeholders. Examination of the critical issues pertaining to this situation as well as potential solutions helps to clarify this particular problem.

Critical Issues

A major factor influencing the case study involving DHR Patio Homes, Benefit Bank, and the Home Builders Association pertains to matters concerning potential conflicts of interest. DHR established a relationship through the bank that was based upon an agreement to repay a line of credit within a specific time. DHR began experiencing problems with regard to getting approvals on funding requests and approached the bank directly to ask what had changed. This was necessary as the delays were contributing to conflicts between the builders and their suppliers.

When approached, the bank indicated that policies and procedures had changed in recent times and even referenced a need to provide auditors with further information. This statement was suggestive of two things. First, something has happened to prompt the bank to change its policies. Second, the sudden need to fulfill the requirements of auditors is indicative of something else happening behind the scenes with the bank. The problem is that DHR does not know if the bank is being honest about its changes in policies or if the reasons behind the requirements are more nefarious in nature. Ethical decisions require analysis of reasons and motives that may indicate a conflict of interest (Thomas, 2012). If the bank is being forthright then the homebuilders should consider the value of additional regulation as it may reflect...