Philip anderson Case study

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1. Which investment alternative:

a. Provides the highest returns to the client?

A is acting in regard to the client, doing what they want so they receive help and the best benefit.

b. Provides the highest profits to Stuart & Co.?

B just give the company higher profits not caring about the clients and potentially losing clientsas they won’t have such an enjoyable experience. 2. If your answer to (b) is not the same as your answer to (a) and Philip recommends the highest profit choice, is he acting unethically? Why or why not?

Philip isn’t acting unethical, he is just doing what the company wants of him. If they aren’t concerned with customer relationships then he doesn’t have to make them. In his mind he feels like he is acting unethical, but in reality this is not the case.

3. Which alternative should the top management of Stuart & Co. want Philip to recommend to his client? Is the company's control system designed to ensure that choice?

The top management at Stuart & Co. would want Phil to recommend option B. Option B provides Stuart & Co. with the highest profit,

therefore, that is what they would push Phil to offer to his clients. Stuart & Co.’s control system is set up to ensure this choice. The management at Stuart & Co.’s investment firm implements the results control. Stuart & Co. requires their branch managers to push their clients towards specific products; they have incorporated this into their annual sales budgets.

According to Chenhall, Kallunki, and Silvola, formal controls can assist in generating innovation. Stuart & Co.’s formal control of initiating sales towards specific products are used to help financial advisors to encourage them to identify new trends, to see new opportunities and threats, and to adopt new strategic postures.

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