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Cruickshank, Garth& Romano is a startup company, formed by Richard, Chris and Wayne to provide industrial, residential and commercial evaluations, and also consulting services and feasibility analyses in National Capital Region (NCR). Based on the experienced principals who enjoy good reputations, Cruickshank, Garth& Romano is aimed at providing high quality service as NCR’s top four firms which dominate the commercial appraisal market in NCR, but they tend to do business with the owners of smaller properties. Recently, because of the economic regression, to get sufficient revenue, the principals have realized that getting new larger developers is crucial to Cruickshank, Garth& Romano. Richard Romano, one of Cruickshank, Garth& Romano’s principals, is doing business with Watson& Musico Developments, the major developers and property owners in NCR. Initially, this ideal business will bring not only very attractive benefit to the company but also a good chance to build good relationship with Watson& Musico Developments which is company’s new desired target. However, John Mortimer, the controller of Watson& Musio, needs high estimated value to refinance company’s property and he is not satisfied with Richard’s preliminary evaluation of 30.5 million. Meanwhile, he requests Richard to raise the value to 35 million by ignoring the side agreements and using full face rental rates. Now, Richard meditates on whether he should submit to John’s will by raising the value to $35 million. Stakeholders
Richard Romano is the principal and founder of Cruickshank, Garth& Romano who concentrates on large commercial properties, complex appraisals, and consulting service. He has worked for one of the four major NCR firms for several years which give him high reputation and rich experience. Besides, he is also an Accredited Appraisal Institute of Canada (AACI) candidate. During the estimation of Watson& Musio’s property, Richard accurately calculates the estimated value by direct capitalization which is reasonable and thoughtful but it is unacceptable to John which may cause economic loss and bad effect on company’s reputation after John’s complaint. If Richard chooses ignoring the side agreement and uses the full face rental rates as John’s desire, this deal will bring an attractive revenue and good relationship with Watson& Musio but ethically, he withholds the truth. As a new company just opened 3 month, Cruickshank, Garth& Romano needs the business with Watson& Musico, especially after changing their target from the owners of small properties to larger developers. Although the company has three partners who enjoy the high reputation, Cruickshank, Garth& Romano is still challenged over the ability of the operation and preparing appraisal. As the controller of Watson& Musio Developments, John Mortimer needs high property evaluation to solve the restricted cash flow for its aggressive business strategy. Because of the unsatisfying with last estimation given by one of top four companies, John finds Cruickshank, Garth& Romano but unfortunately, their estimation is even lower which would cause the totally failure of refinancing the property. Other stakeholders include Chris and Wayne, the bank and Appraisal Institute of Canada. Both Chris and Wayne hope Richard make the right decision to bring most benefit to Cruickshank, Garth& Romano. Meanwhile, Chris and Wayne would totally support Richard. The bank hopes Cruickshank, Garth& Romano would use the most scientific calculation method to truthfully estimate the value of the property without hiding any facts. To AIC, they hope all of AIC members including Richard to follow their Ethical rule and Standard rule to give an accurate and objective estimation which would also benefits their customers. Ethical Issues
Considering the importance of keeping good...