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No Harm, No Foul?

DILEMMA

A recent sale at our high-volume automobile franchise was canceled by the customer. Our clerks had already submitted the paperwork to the state, and financing had been arranged. As far as the registry was concerned, there was a lien on the vehicle, even though it was a new automobile. A lien release needed to be received from the finance/credit company before the registry could return the paperwork, allowing the vehicle to be legally resold.

In the meantime, the car was resold. And the new purchaser indicated that he had an urgent need for the vehicle. I knew that it would take two days to get the lien release from the financing/credit company and another day to get the paperwork form returned. These kinds of situations are commonplace occurrences at our dealership.

I could take a lien-release form from another transaction, alter the document with the current customer’s information, send it to the registry that day and complete the transaction in a timely manner — satisfying both the salesman and the customer. When the correct lien release came from the credit company, I could then simply substitute for the altered document. It seems like everyone would win. Is this OK?

Finance Leader
East Coast Auto Dealership

RESPONSE

It is commonplace in business (and other walks of life) to find it desirable to bend established rules and/or principles to achieve what appears to be better results for all parties involved. For example, for the sake of expediency, it is not uncommon for a supervisor who is physically absent to ask someone to forge his or her signature. However, what you are thinking about doing would likely be considered fraudulent (and most likely, illegal).

Even if the act were legal, trying to decide right and wrong based on consequences (vs. sticking to principles) has several significant weaknesses. For one, we can’t predict nor control the outcome of our choice. As we have seen with recent corporate accounting scandals (particularly pre-booking sales that “we will make up in a later quarter”) and the subprime mortgage crisis (“rising home rates will bail us out”), we really can’t guarantee what will happen in the future. Second, I think we need to be very careful with the practice of setting aside principles for the sake of expediency. Such a practice, if done frequently enough, will lead to a type of relativistic morality that will undermine the trust and stability necessary for our economy and broader community life to function well.

Please don’t get me wrong, I do think there are situations in which adverse consequences may in fact require that we set principles aside, such as the case in which lying is necessary to save a life. However, the adverse consequences in your case are not so compelling. Can’t your new customer be satisfied with another vehicle on your lot, or rent a car for a day or two while waiting for the lien to clear? Likewise, can’t your salesperson wait an additional day for his commission, or be provisionally credited early with the sale in the case of a time-sensitive bonus?

Kenman Wong
Professor of Ethics, School of Business and Economics
Seattle Pacific University

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