WRITTEN ANALYSIS & COMMUNICATION

(Group 2 - Section D)

AGAINST​ ​THE​ ​GRAIN​ : ​JIM​ ​TEAGUE

PGP 2018-2020
Term - II

Submitted By: Submitted To:

Shakti Sethi - 2018PGP341 Prof. Abha Chatterjee
Baldev Rinwa - 2018PGP088
Anurag Kumar - 2018PGP502
Khangkhar Brahma - 2018PGP173
Shrey Patel - 2015IPM103
Yash Madhani - 2018PGP434
Prashant Chandra - 2018PGP266

INDIAN INSTITUTE OF MANAGEMENT INDORE

Prabandh Shikhar, Rau-Pithampur Road,
 LETTER OF TRANSMITTAL

1st November 2018

Prof.​ Abha Chatterjee
IIM Indore

Subject: Report submission of case “Against the Grain: Jim Teague in Tanzania ”

Ma’am,

With respect to the instructions given in class, we’re submitting a report on the case “Against the Grain:
Jim Teague in Tanzania (A)” in partial fulfillment towards the WAC course.

This report examines the internal struggle that Jim Teague is facing with regards to loan
disbursement for KiraFlour. The possible options available, along with our recommendation, have also
been discussed and analyzed.

Regards
Group 2 - Section D
 ​EXECUTIVE SUMMARY

This case is about how Jim Teague has to take a decision on whether AgriFund must provide funding to
KiraFlour in Tanzania. The dilemma arises because non-disbursement would have a negative economic
impact on the farmers due to bad harvest whereas disbursement of loan could lead to potential societal
risks and reputational damage in case the TCA report was true. The best option for Jim in this scenario
would be to convince the Kiravus to come up with some collateral for the loan and obtain a governance
NOC so as to ensure timely disbursal of loan and quality of the flour.
TABLE OF CONTENT

● SITUATIONAL ANALYSIS

● PROBLEM STATEMENT

● ALTERNATIVE SOLUTIONS

● CRITERIA FOR EVALUATION

● EVALUATION

● RECOMMENDATION

● IMPLEMENTATION

● CONTINGENCY PLAN
 SITUATION ANALYSIS

Jim Teague, a Harvard student is currently interning with Agrifund, where he is assesing capital
needs and crediblity of agro processor in Tanzania. Among the five clients, KiraFlour is the
largest client and is seen as an ideal recipient of financial support from Agrifund.

During his initial days of internship, he finds out that corruption is widespread in the region.
Soon he developed a close relationship with owners of Kiraflour. Jim came to know about E.
Coli contamination and also about the distribution of some unlicensed products. Jim had already
experienced that corruption is very widespread in north-eastern Tanzania. Now if the product
actually contains harmful E. Coli, then it is a health hazard for thousands of consumer. Jim is in
a dilemma of whether he should recommend KiraFlour for loan, where he has to compromise
with his morals and loan will also be at risk as KiraFlour might face shut down due to
non-compliance of TFC rules. On the other hand, if he doesn’t recommend KiraFlour for loan
then it will impact the employees of KiraFlour and the dependent farmers.

PROBLEM STATEMENT

What should Jim recommend to AgriFund concerning the loan to KiraFlour considering the
complex trade-off between personal relationship and professional responsibility?

ALTERNATIVE SOLUTION

■ Jim should recommend sanctioning the loan. The shutting down of Kiraflour is uncertain and so
is the presence of E-coli in their products. He should trust Baba and give him the benefit of
doubt.
■ Jim should recommend to not give out the loan. Baba will not bribe the authorities and that may
lead to the shutting down of Kiraflours. Agrifund would not be able to recover money if that
happens.
■ Jim should recommend giving partial loans. A portion of money can be granted as loan to cover
the cost of buying wheat from farmers. Agrifund can suggest further testing and wait to release
funds until they are sure that the products are healthy and approved.
■ Jim can ask Baba to bribe both TCA and TCF and gain the permissions. The company can
then sanction the loans.
 CRITERIA FOR EVALUATION

■ Agrifund Reputation: Jim’s first loyalty lies with the company. He would not like to recommend
anything that would affect the company’s financial as well as corporate standing.
■ Jim’s career: Being the first internship the decision he takes will have a long term effect and will
define the direction of his career.
■ Ethics: Jim would not like to compromise on his ethics. Jim did realize that he wants to uphold
his value over comfort.
■ Tanzania Stakeholders: Jim will consider Farmers and Consumers of the product as they are
indirectly affected by his decision.
■ Relationship with Baba: Jim has grown incredibly close to Baba. His judgment now will be
clouded by this relationship.

EVALUATION

1. If the loan is approved in the absence of any testing and additional information that may be
required to make a rational choice, Jim would have violated the fundamental principle of
loaning, the principle of due diligence and this may harm his career prospects. Two possibilities
follow, the final product may or may not be contaminated. In the better of the two, many farmers,
Baba and Mama, and AgriFund will have benefitted as a result of this decision, however not on
account of having made a well-informed choice but by sheer luck. In the case that said luck
takes a turn for the worse, tens of thousands of KiraFlour’s consumers will face a high risk of
contracting the various diseases associated with E. Coli.

1. Denying a loan due to such ambiguity in Environment, i.e. absence of certain Licenses with
KiraFlour and threat of presence of E.Coli is a rational decision and follows due diligence. This
won’t harm Jim’s career as he did not base his recommendation on personal relations with Baba
or on any assumptions. Rather, Jim took a call based on facts. In this alternative Jim does not
violate any ethics nor does he show any Moral relativism. Lastly, lack of funds may hinder
KiraFlour’s expansion plans or the 450 farmers but the flip side of the story may injure or even
cause death of hundreds of thousands of customers of KiraFlour.

1. The idea of Partial credit release is ethically strong but it is not the best for AgriFund as they are
putting initial procurement capital at risk. This may also put Jim in a challenging situation if 4
weeks down the line the results for E.Coli turn out to be positive, as TCA alleged. Taking such
high risks at the beginning of his career is not a good move.
1. This alternative is based on Moral relativism. We have already seen Jim being
concerned about his dual locus of ideals, as he bribes the Police officer in Tanzania.
Furthermore, AgriFund’s image and vision do not allow of the same.

RECOMMENDATION
IMPLEMENTATION

The solution need to be implemented well as these can have serious repercussions on Jim Teague
and on the company. As Jim had grown very close to Baba, it definitely would not have been
easy to deny him the loan. Moreover, this rejection might not be accepted well by Baba. Jim
should try to tell Baba what the side effects of E.coli are and how adversely it affects the life of
the consumers of Kiroflour’s products. Also, at the same time he should ask Baba and teach the
farmers the side effect of using cow dung in the soil which could potentially harm thousands of
citizens in the country. Moreover, he must ask Baba to get the license as it is the need of the hour
to do business in the country of Tanzania. Baba and Jim have close personal relationship, so may
be Baba would try to understand the position in which Jim is and look for some other alternatives
for investment or try to improve the quality of his products.
 CONTINGENCY PLAN

If in any case Jim gets to know that TCA and TFC are corrupt organization, then he should ask
Baba to get the license as it the basic threshold for them to do business. And also, he should go
on for some personal investigation and know the real state of products and the market. If he finds
such case favorable for the company, then he could also recommend giving loan to Baba.