Reference no: EM132635794

Question - Tom has already secured some big clients and finds his work empowering with great potential for professional development and growth. Tom has been mentored by the chief executive, Paul Davidson, and they have formed a collegial professional relationship in a short time. In looking through the receipts and records in more detail, Tom discovered these expenses covered a range of costs that utilised the contributions made by the insurance members. Based on his observations, Tom has found that Paul Davidson very openly discusses and promotes these activities and expenditures, even claiming that they are normal part of business and networking.

Paul even went as far as to say that such activities were necessary to help the insurance firm maintain its competitive edge and build a collegial reputation in the financial services sector. From Paul's point of view, using members' contributions to fund such activities is crucial to establishing and maintaining lasting professional relationships and attract more customers. Based on his education and induction training, Tom is of the view that these activities and expenditures are not a beneficial use of members' money, and in recent times these have resulted in extra fees being passed to members. The general view of the firm culture, however, is that these activities and expenditures are seen as marketing and promotion activities, all with the purpose of helping the firm thrive in in a competitive landscape.

Tom is working hard, becoming a rising star and has fostered wonderful personal relationships with his colleagues, especially his mentor Paul. And at the year end, he also enjoys the dinner in the five star restaurant paid by the contributions. Paul has placed a lot of confidence on Tom to take part in the networking efforts, but as outlined earlier, Tom gradually discovers the controversial misclassification of costs and how the source of payments come from the members' contributions. Catching up with former university colleagues who have also been employed at rival insurance and financial service firms, Tom has realised that these activities appear to be common everywhere.

Based on his training and education, especially with regards to the ethical codes of conduct, he made a commitment to as a professional. Tom feels conflicted as, depending on the choice he makes, he may lose a good mentor and friend in Paul, derail a rising career, or even may face some regulatory and legal consequences. It may not be the members' best interests to see the insurance firm closed, as the members may need to switch to another insurance firm and the new one may lack of the knowledge about their needs.

Why is the AAA decision model more preferrable to this case, in contrast to the Hartman Decision making model or the Good Decision making model (Longstaff)