Ethical Dilemma: A Case Study of Harry Markham's Loyalty Conflict

This case study delves into the ethical dilemma faced by Harry Markham, the chief investment advisor at Investment Company Associates (ICA), who discovers significant undisclosed pension fund liabilities within the firm. Torn between his loyalty to the company, its clients, and his ethical obligations, Markham grapples with whether to reveal the truth about the firm's financial instability, which could lead to its collapse, or to remain silent and potentially breach his professional code of conduct. The analysis employs a critical thinking strategy to define the problem, identify potential solutions, and select the optimal course of action, highlighting the conflict between practical considerations and ethical responsibilities. The case underscores the challenges of balancing conflicting loyalties and upholding ethical standards in the face of organizational pressures.

Harry Markham’s Loyalty Dilemma Case Study Analysis
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Harry Markham’s Loyalty Dilemma Case Study Analysis
The case involves a case of Harry Markham, a professional investment advisor, who
finds himself in a dilemma. Markham has worked for Investment Company Associates (ICA)
since 2004 as the chief investment advisor. The company faces in pension funds liabilities which
its clients, the government, and the firm itself are still not aware of. Markham is summoned to
deliver a report about the progress of the business. As an honest service provider, he is confused
about whether or not to disclose the financial liabilities the company is going through. The
greatest fear is what will happen when the issues come to the attention of the firm’s board
members, its clients, and the public investor’s representatives among another beneficiary. At the
same time, withholding the truth will be a breach of the code of ethics that insists on integrity
and trust in operation. The confusion builds up with the intention to keep loyalty to the
stakeholders and that of practice ethics (Minahan & Reavis, 2012).
The one of contention in the case study involved dealing with conflicting loyalties.
Markham has to remain loyal to the firm, the clients, public pension investors, the board of
trustees and the pensioners themselves. As the chief investor in the firm, Markham has the
responsibility to protect his firm. At this point, the destiny of the firm is at stake. The hidden
truth is that there are growing liabilities in the business such that the capacity of the organization
to carry out its activities is reducing. The investors in the firm are at the brink of losing their
funds (Oxley & Wittkower, 2011). Given this growing liabilities level, every investor will seek
to terminate the investment once they realize that the firm is no longer the best which means that
the firm will lose its clients and subsequently close down. Added to the fact that government
workers and employees use the firm for pension plan such revelation would cause severe
consequence.

The critical thinking strategy I would employ in analyzing this dilemma is by defining the
problem, identify available solutions and select the best solution. This method is effective
because it allows for critical thinking and logical reasoning to diffuse a situation. In the case
study, Markham’s dilemma developed between the ethical and the practical bit of the issues.
Practically, it was evident that the firm recorded gross liabilities on the investment funds.
Though no party was a preview to such developments, the existing records showed that the firm
and the investors as a fraternity was losing a lot. From an ethical point of view, it is expected that
investors should be advised appropriately (Maher, 2016). Based on the presenting situation, it
was clear that the best advice to give the investors to reduce or quit the investment. However, the
answer was the tight string between the firm’s current reputation and the future. It was simply a
choice between practicability and legalities. Markham lacked accurate accounting figures to back
up his claims. At the same time, it has an accurate but disappointing figure will do him no good.
Generally, the case study mainly dwells on the dilemma between existing facts and
ethics. Markham is put at risk of losing loyalty which at the same time he has the chance to
protect (Mahmood, 2016). The most challenging aspect of the situation is a glaring breach of the
code of conduct. The guiding ethics requires investment advisors to remain truthful and honest to
the clients. As an investment advisor, the advocacy role on behalf of the client should not be
taken for granted the benefits of keeping loyalty and risk of losing the same marks the gross
Markham’s dilemma.

References
Maher, B. D. (2016). Divided by Loyalty: The Debate Regarding Loyalty Provisions in the
National Defense Education Act of 1958. History of Education Quarterly, 56(02), 301-
330.
Mahmood, S. (2016). Effectiveness of an Instructional Intervention in Developing Critical
Thinking Skills - Role of Argument Mapping in Facilitating Learning of Critical
Thinking Skills. Proceedings of the 8th International Conference on Computer
Supported Education. doi:10.5220/0005798003300336
Minahan, J., & Reavis, C. (2012). Harry Markham Loyalty Dilemma A | LearningEdge at MIT
Sloan. Retrieved February 27, 2019, from
https://mitsloan.mit.edu/LearningEdge/Leadership/HarryMarkhamA/Pages/Harry-
Markham-Loyalty-Dilemma-A.aspx
Oxley, J., & Wittkower, D. (2011). Care and Loyalty in the Workplace. Issues in Business
Ethics, 221-243. doi:10.1007/978-90-481-9307-3_12