Through the eyes of the whistle blower Harvard Case Solution & Analysis

Through the eyes of the whistle blower  Case Study Solution

First, what are the challenges that she is facing?  What impact can this have on her? (Description of the problem).  Secondly, what are Sherry Hunt’s values and motivations?

Sherry hunt joined the Citibank as the chief loan underwriter with her team working under her supervisor.She had one direct reporting supervisor and one upper management head.Since After her joining sherry along with her team find many of the defaults in the Citibank loan system. She found number of glitches and lose links in the Citibank loan issuance practices.A large defect she found to be the incorrect and inadequate information of the lender and the fabricated requirement. This has been mostly done by the sales personnel’s who on the road to make high commission fabricated major documents of the clients, leading to a misleading fact files. In addition, since these sales personnel’s had inadequate knowledge of the income of the customer, they file in the boxes themselves, perceiving the income themselves, which ultimately lead to the loan sanctions and disbursement with no guarantee of recovery in the given period.

However the challenges has been beyond this.The major challenge she faced was the non-serious attitude of the Citibank towards her analysis of the risk posited to the group, also the attitude of the sales person on pointing out the glitch of the system and the techniques they used for making the right amount of commission.

Lastly, Hunt faced the challenge of the due to the constantly changing culture of the organization.Since the upper management continuously hanged, there had been a different chain of guiding rules and policies running in the bank. In addition, after the financial crisis hit the banks, the change in upper management led to the Change in the position and responsibilities of Hunt. This not only disgusted her but posit the threat to her on security which is on high risk due to flat job market.

Apart from this, since Hunt and her team identified the fraudulent activities and loose links in the group, she stood up for those frauds and reached out to HUD, for which she never got the answer back, however, since she always been the ethical and upright person, she felt the need to address the fraud and bring it on table, but that would cost her the job and her position and since the job market is already flat, she feels the challenge in doing the right thing,. Either she can uncover the fraud in front of authority or she can save her job by remaining quite. This is a challenge for Hunt, as she has always been an upright ethical person in past.

Why has no one else blown the whistle at Citi-bank so far?  What are the organizational barriers to blowing the whistle, be specific? 

Well there are number of reason why no one has blown the whistle in the Citibank.The first and foremost reason is the continuous change in the upper management.It is the responsibility of the upper management to oversee and analyses the performance of the loans on timely manner. The continuously change in the upper management led to the deadlock in developing aright mechanism to perform the timely audit, as the new personnel hired would start the job from scratch.

The second reason no one blew the whistle is the pay system in the banking sector.Since the sales personnel are given the salaries on commission basis, they tend to fabricate the documents in an attempt to make the profits.So even if they identify the fraud or lose link, they won’t take up an action. Also, the overall loan department is paid commission or promotion on the basis of the loans approved. This restricts the individuals to perform the job role ethically and by the book.

Lastly, since after the financial crisis have hit the markets badly, everyone is concerned for the security of the job., This is another reason for not blowing the whistle, since blowing the whistle will mean the audit of individuals and firing as a punishment, the managerial level and lower management is quite about the fraudulent and defaulted activities in the bank.

  In terms of alternatives, who are the possible stakeholders that Sherry can tell?  What are the possible pushbacks and/or anticipated risks associated with telling these stakeholders? 

There are multiple stakeholders like the HUD, the top management, the anti-corruption council and the central bank which can be reached to inform the fraudulent activities in the Citibank.In case of sherry, she should reach out to the anti-corruption authority at first and file the case under the unlawful activities in the bank. In doing so, the major risk associated is the risk of job loss, which might occur due to the reaching out to the authority directly.

In addition, before reaching out to the authority, sherry should also consider reaching out to the head of REL department along with the main CEO of the Citibank in loop.This will make the news a serious issue to be resolved as the upper management is always concerned about the profitability and sustainability of the business. If at the n she doesn’t receive any answers she should reach out to the central bank, which is the regulatory bank, and manages the operations and functioning of the commercial banks with adherence to the law.

However, reaching out directly to the Central bank, will bring defame to the Citibank and may create hype in market, and in reaction, Sherry may be questioned in front of authorities for the action which may humiliate the stance of sherry.In addition, this may also make the additional responsibilities of the position and corner her to one room lading to more severe issues in the system.

Lastly, if she reaches out to the CEO and the Head of REL, this may create a conflict between the lower level managers and chiefs and also the supervisors for not reaching them out first, making the work environment difficult for sherry to operate in.......................................

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