Citizen Bank Case

The merger of U. S. Citizen coast and Louisiana Purchase depository financial institution (LPB) in 1998 resulted in a formation of a financial bolide possessing core competencies in commercial lending and innovation. Upon recognizing the much needed annuity-driven trade potential existing within the U. S. college population, the LPB pioneered the schoolchild realization fluff designing in 1989. Indeed, the student conviction card program proved to be more profitable with net income margin around 6 per centum compared to that of 4 percent for non-student product offerings.In fact, LPB was collecting revenue on 60 percent of its accounts. The sheer magnitude of honorable mention wont among college students caught commons attention. Well respected college professors claimed direct correlation between credit institutions mastery and college students ir answerable financial behavior leading to debt and higher drop-out rates. referable to this increased open awareness, The U. S.General Accounting Office (GAO) initiated an investigative deal to further analyze the magnitude of student credit card usage and its consequences on students academic, financial, and personal well-being. The GAO asked LPBs head of Student Card operate variant, Michelle Jeffries, to participate in a survey soliciting data pertinent to their college student accounts as well as culture regarding LPBs selling climb to this demographic.Data submitted would be compared to that of opposite (unnamed) financial institutions and published (in aggregate) without poseing individual responders. In accessory, Michelle Jeffries was notified that a popular investigative television serial publication, 60 Minutes result be featuring a story on student credit card and plans to portray credit card issuers in a negative absolved similar to that of tobacco companies. I believe Michelle is in the best line to be the key decision maker due to the fact that she has the about insight int o divisional operations, objectives, and values.She is the leader of the student credit card service division and should be the one to decide and communicate nigh locomote after having gathered input from other constituents including the President, Risk Manager and other employees. Michelle needs to consider the interests of U. S. Citizen Bank, its employees and shareholders, all calling for a profitable and thrive system of rules.In addition, she needs to consider the rights of general public and media to know what U. S.Citizen Banks ultimate objectives are, including its corporate values and goals. Does U. S. Citizen Bank need to encounter a moral obligation to look after the best interests of nodes it serves? If so, what is in college students best interest when it comes to credit cards? Is it ethical to eliminate credit to students? Finally, Michelle needs to think about her own virtues and character in addition to those of the organization. What virtues does the famil iarity value the close to? Do those align with her personal virtues?The most important ethical issue at hand is the implied allegation that success of U. S Citizen Banks Student Card Services division was at the expense of college students financial well-being. That begs the question of moral obligation and the morality of extending credit to college students. another(prenominal) important ethical issue is U. S. Citizen Banks response to the public in regards to the GAO survey as well as 60 Minutes. The bank is being asked to disclose confidential customer teaching as well as their business and marketing plans.Lastly, Michelle needs to conjoin her own personal values to those of the organization which she leads. She has a solid click record of being honest, fair and ethical and she needs to lead the organization keeping those core values in mind. Lastly, she needs to assure those share values are actually being practiced. Michelle is presented with the following possible optio ns. She could indifference GAOs request for information on grounds of protecting customer privacy as well as corporate business and marketing plans in terms of promotional and marketing strategies.She could also choose not to publicly address 60 Minutes to avoid the possibility of self-imposed negative attention on U. S. Citizen Bank in relation to the series. Another viable option would be to submit the requested information to the GAO as well as publicly address the 60 Minutes series while firmly fend for companys current scheme without identifying any holes or areas for improvement. The third option would be to respond to the GAOs request as well as release a public statement in response to the 60 Minutes series intelligibly identifying U.S. Citizen Banks corporate values, objectives and responsibilities to all of its stakeholders.In both responses, Michelle could spot things the corporation believes theyve done right as well as things they could and plan to improve on in re sponse to helping college students become more financially responsible when it comes to credit card debt. Michelle should respond to the GAO survey by submitting requested account data and marketing information while emphasize companys strong commitment to customer privacy and onfidentiality of information submitted.She should address the 60 Minutes series by intelligibly identifying and defending her organizations values and commitment to its customers. She should highlight companys accomplishments and strides in the area of student credit card education programs. Furthermore, she should identify areas of improvement with well-defined sue plans that pass on elevate the organization to the next level vs. merely pointing out weaknesses to the competitors.The overall theme should re-iterate companys commitment to all of its stakeholders, acknowledging what theyve done to support that commitment followed by an action plan to further evolve and improve their student credit card educ ation programs. They should raise the bar for all credit card issuers on educating college students on responsible use of credit cards. More importantly, they should publicly greet their ethical responsibility to provide customers with information necessary to make break financial decisions.Michelle also needs to ensure external communication aligns with the versed translation in order to successfully execute publicly denote action plan. Internal stakeholders need to be assured that external depicted object is honest and action-driven and not just a media spin to protect companys interests. An internal communication to employees and shareholders should clearly translate the external capacity into sustainable long-term profitability and well-being of the company.Considering the interests of all parties involved, the suggested nuzzle is clearly the right one. By publicly acknowledging and recognizing an increased concern surrounding college students credit card debt, they will gain publics sympathy and respect. By choosing to do something about it via a well defined action plan, they will gain publics trust. By gaining publics trust, they will gain a more loyal and increased customer brutal which will contribute to companys long-term profitability.In addition, this approach will clearly communicate companys values and traits of responsible corporate citizenship which will set an example for other companies in their industry, including their competitors. matchless might argue the organization should really re-evaluate the business they are in as it may not be morally responsible to extend credit cards to students. I would argue that the morality question for sure does come into play and should definitely be considered when deciding on tactics used to promote and market credit cards to students.However, the actual addendum of credit to students, by its nature, is not unethical. In fact, when utilized properly, it serves students interests by allowing t hem to conformation credit history while teaching financial responsibility and spend within means. In conclusion, while credit lending geared towards college students is not considered unethical business to be in, marketing techniques utilized to promote much(prenominal) products and service may certainly cross ethical boundaries.