Ethical dilemmas: Commentary on Case 4: Pump up the volume

These cases are based on a series written in the mid-1990s by Paul Lynch for Management Consultancy magazine in which he posed ethical dilemmas that might confront management consultants and asked readers what they might have done in those circumstances.

Paul followed up each case with a commentary based on readers’ observations and what had happened in reality.

Last month’s dilemma found Antonia, our multidisciplinary and widely experienced consultant assigned by a partner in Smith & Jones to assist a client company to manage its cash flow, while another department of the firm, corporate reconstruction, evaluated the options open to the client and its bankers.

While this process was going on Antonia was advising and assisting the financial director in the judicious balancing of the cash flow. Asset sales were organised, spending was slashed and the creditors carefully prioritised or paid. By these means the client survived long enough to reduce considerably the bank’s exposure, at which time the business was sold as going concern basis.

Following the completion of the work Antonia's boss reprimanded her for failing to take the opportunity to maximise the firm’s billing. Antonia was angry since she carefully husbanded her input so that the client had received the best service for the least cost. In fact, she felt the very much greater fees charged by the corporate reconstruction department may have contributed to the business’s downfall.

I suppose that the answer depends on your point of view. Perhaps the partner was merely attempting to make Antonia more alert to the opportunities available. Or perhaps he was attempting to take advantage of the client’s vulnerability and charging every penny the situation would allow without regard to the client’s best interest. Who knows?

What I can tell you is that Antonia resigned from Smith & Jones.