A CEO of a software company meets problems to pay his employees. Indeed every fast growing business, no matter how successful, struggles with cash flow problems. However, the firm has received a check for $94,000 for a provision which it cannot make. But this amount of cash allows for the CEO paying all employees and expecting they leave the company which would bedisastrous for it.
Cashing the check without saying at the client the impossibility to achieve the provision would be at the limit of legality.
On the other hand, if the CEO does not cash the check, the company would meet financial difficulties, and some people would be not pay for their work.
The question that meets the CEO is: “Should the company give priority to its interests or should it behonest toward its client even if the situation for the firm would be dangerous?
So in this context, some parts will be wrung and the CEO must take a decision.
Stakeholder groups identified :
← The customer who has looking for a customized version of the company's
Software and who are given the check.
← The CEO of the company who has taken the check knowing that her companycouldn’t deliver the product.
← The employees who risk to go out or make a mass exodus if the company didn't get their money on time
← The Direction team :
- chief financial officer : concerned about cash flow, wanted to cash the check
- The vice-president of sales whose compensation was tied to revenues, wanted to cash the check.
- The vice-president of client services thoughtit was a bad idea to alienate a big customer.
← Suppliers: the CEO and his key managers aggressively went after every receivable and slowed down every payable.
← Others customers who owed his company money. CEO asks them to pay their credit.
Problem: For each person according his function; act in his owns interest and not in the interest of the company.
Identification of AlternativeCourses of Actions
There exist seven obvious alternative courses of action in this case:
• Cashing the check to pay employees in saying at the client that he cannot deliver the product.
The CEO takes the decision to cash the check because it is necessary for the subsistence of the company but he warns the client and try to find an agreement.
• Cashing the check to pay employeeswithout saying at the client that he cannot deliver the product and that he has taken the check to pay his employees because he has a problem of cash.
The CEO takes the decision to cash the check because it is necessary for the subsistence of the company but he does not warn the client.
• Keeping the check without cashing it, make pressure on suppliers and customers in order to pay employeeson time.
The CEO does not take a decision about the check, he just keeps it. The employees are paid when he will sufficient cash.
Putting pressure on his suppliers increases the time for payment of his purchases.
Putting pressure on his customers reduces the time for payment of his sales. The time of payment of suppliers is becoming more important than the time of payment of hisclients; he found a sufficient cash to pay his employees on time.
(POUR celle-ci penses tu pas qu’il faille que l on la sépare en deux avec il le dit ou il ne le dit pas ?)
• Returning the check but without explaining the situation at the employees to avoid an exude of them and make pressure on suppliers and customers.
The CEO returns the check, and to prevent employees to leave thecompany, he does not say them the situation. Then the company makes pressure on suppliers to pay them later, and on the customers to receive their payment before.
• Returning the check, explaining the situation at the employees and make pressure on suppliers and customers.
The CEO returns the check, and says the situation at the employees and tries to find an agreement with them. Then the...