Written Analysis and Communication

A report on

Against the Grain: Jim Teague

in Tanzania
Submitted in the partial fulfilment of Written Analysis and
Communication Course
Letter of Transmittal

Dear Ma’am,

This report is submitted according to the instructions given for the case - Against the Grain: Jim
Teague in Tanzania in partial fulfilment of WAC course. This report discusses the issues faced by
Jim Teague and also suggests possible options for him.

Thanking You

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Executive Summary

The report highlights the ethical dilemma experienced by Jim Teague, an intern working for
AgriFund in Tanzania. His objective is to analyse whether KiraFlour, AgriFund’s main client,
should receive the loan disbursal. The report discusses the findings discovered by Jim and how
they lead to a conflict in his mind about honouring his relations with Baba and trusting him, or
changing his stance on the disbursement of the loan. The report then based on the Financial,
Social, Environmental and Moral impact of the decision, recommends not to disburse the loan to
KiraFlour.

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Table of contents

1. Situation Analysis…………………………………………………….5
2. Problem Statement…………………………………………………..5
3. Options Available…………………………………………………….5
4. Criterion for evaluation ……………………………………………...6
5. Evaluation of options………………………………………………...7
6. Recommendation…………………………………………………….8
7. Action and Implementation Plan……………………………………9

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Situation Analysis

Jim Teague wants to give his opinion to Allen about KiraFlour to clarify the ground reality which
will impact the decision of AgriFund on whether to disburse the loan to KiraFlour or to suspend.
Jim Teague was a student at Harvard Business School and a summer intern at AgriFund, a social-
impact investment fund. Allen Sweatman was the boss of Jim at AgriFund. Jim had moved to
Tanzania to work with Agrifund’s largest client, Kiraflour. Kiraflour is a small company that
specializes in the milling of grain-based flours and is headed by Albert “Baba” Kiravu. Baba and
his wife, Mama welcomed Jim with a warm heart and Jim begins developing a sense of loyalty
towards Baba. KiraFlour’s highest revenue flour had allegedly tested positive for E-Coli as per
TCA (Tanzanian Certification Agency) and Jim had found that all the farmers were threshing on
cow manure. Tanzanian Food Commission (TFC) has sent KiraFlour a series of warning
regarding Kiraflour’s distribution of non-TFC licensed flours. Baba has stated that TFC and TCA
both are corrupt like most of the government agencies in Tanzania and the E.Coli accusation is
untrue. Jim wants to verify the report of TCA by the third party labs, but can’t due to time
constraints. Jim is supposed to give his recommendations on the loan to KiraFlour.

Define the problem statement

What should Jim tell his boss, Allen, on the phone call scheduled in the evening regarding the
loan to KiraFlour in light of the discoveries made about the company and the facts uncovered?

Options of the problem

Jim can consider the following options for the decision to be made in light of the facts and
problem mentioned above

1. To go ahead with the sanctioning of the loan to Kira Flour

2. To cancel the loan sanction on the grounds of E.Coli and missing certification

3. To provide a temporary sanction of an amount lesser than 50%

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Teague can stick to providing the disbursement to KiraFlour since there is a high probability that
like most organizations in Tanzania, TFC and TCA might also be corrupt and might have put these
false accusations to extort more money from KiraFlour, thereby saving the livelihood of hundreds
of farmers and employees. Second, he could stop the disbursement since the activities of
KiraFlour as revealed in the past weeks have turned out to be really sketchy and not acting on it
would put AgriFund at the risk of investing in a company that is responsible for the ill health of
thousands of customers. Third, he could pass a temporary loan sanction, say 40% at a little higher
rate of interest, contingent upon KiraFlour getting the required certification and in the meanwhile,
testing for possible E.Coli presence. If the results turn up positive, further credit extension would
be dropped.

Criteria for evaluation

1) Social Value - the value this option generates for the community of Tanzania
2) Financial Value - the profit it generates for Agrifund
3) Emotional Value - the emotional impact it has on Jim Teague and his loyalty towards
Baba
4) Moral Value - how much the option aligns with the morals of Jim Teague

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Evaluation of options

Criteria

Social Financial Emotional Moral

Sanction Positive Risky

High positive Low
Loan Impact investment

Options Do not Significant

Negative Safe High Very High
sanction Impact

Moderately
Temporary Maybe / May
Safe Moderate High
sanction not be
Investment

Option 1: To go ahead with the sanctioning of the loan to Kira Flour

● Social: The sanction of the loan would improve the condition of KiraFlour thereby
improving the lives of hundreds of dependent farmers who would get more work.
● Financial: Sanctioning the loan is risky for AgriFund because TFC could shut KiraFlour
down on account of non-compliance any time. At the same time, the success of the
company could prove this to be a good investment in a growing company.
● Emotional: Sanctioning the loan would strengthen the relationship Jim has made with
Mama and Baba
● Moral: Sanctioning the loan would mean Jim supporting an organisation which could put
the health of thousands at risk due to the possible E.Coli contamination.

Option 2: To cancel the loan sanction on the grounds of E.Coli and missing certification
● Social: the cancellation of the loan would deny KiraFlour capital just days before the
harvest season potentially damaging the livelihood of KiraFlour’s employees and
hundreds of KiraFlour dependent farmers.
● Financial: This is a safer option considering the issue with TFC licensing and E.Coli
contamination.

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 ● Emotional: This would deteriorate the relationship of trust that Jim had made with Mama
and Baba
● Moral: There is no solid proof of TCA attempting to extort money by faking a report about
the presence of E.Coli in KiraFlour’s most popular product. Moreover, Jim has seen a
possible source of E.Coli contamination in the food processing process of KiraFlour.
Hence, cancellation of the loan would align with Jim’s values and might help in
protecting the lives of thousands of people in Tanzania.

Option 3: To provide a temporary sanction of an amount lesser than 50%

● Social: The social impact is contingent on the fact whether the loan is disbursed or not.
Even after the disbursal, the impact will not be as significant as in the first case as the
amount disbursed is lesser.
● Financial: The terms of the condition in this case favour AgriFund as the disbursement of
the loan is contingent on the addressal of the issues by KiraFlour. It also provides a
higher return (higher interest rates) for the risk being undertaken. But this will lead to a
delay in the process.
● Emotional: This would not hamper the relationship that Jim has with Baba and Mama but
would not do anything to strengthen it either.
● Moral: In this scenario, Jim is sticking to his moral values by not providing the loan until
the E.Coli contamination issue has been resolved.

Recommendation

As KiraFlour is not complying with security standards which includes selling unlicensed products
and products with E. coli bacteria, the loan should not be sanctioned.

Action and Implementation plan

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1. Don’t disclose the decision to Baba: With the solution finalized, Jim should refrain from
telling Baba about it beforehand, since Baba has the power to influence him to change his
mind.

2. Communicate his precise thoughts to Allen: After Jim gets back from the office, he should
call Allen and clearly emphasize the reason for his decision.

3. Talk to Baba about the situation: To honour his relations with Baba, Jim should then tell
Baba about what has happened before Allen does, while trying to give the impression that the
decision had been taken from the top and wasn’t his to make.

4. Get the product tested from a reliable third-party source: Simultaneously, Jim should get
the products tested for E. Coli as soon as possible to confirm the reports. If indeed it is found
to be false, perhaps there is a chance that he can turn things around and allow some part of
the loan to be disbursed. He should also urge Baba to get the TFC licensing wherever required
to avoid further such problems.