Report on the Case

“Against the Grain: Jim Teague in Tanzania (A)”

In partial fulfilment of WAC course

PGP 2018-20
Term - II
Submitted By:
Section G - Group 8

Akhil Sardesai - 2018PGP036

Banhi Biswajeeta - 2018PGP091
Himanshu Rathod - 2015IPM038
Kudikala Sreeraj - 2018PGP182
Rahul Kamath - 2018PGP287
Saavi Gaunekar - 2018PGPH002
Ujjwal Kumar - 2018PGP410

Submitted To:
Prof Madhusri Shrivastava

INDIAN INSTITUTE OF MANAGEMENT INDORE

Prabandh Shikhar, Rau-Pithampur Road, Indore – 453556 (MP), India
रतीय प्रबंध संस्थान इंदौ
 Letter of Transmittal

To: Mrs. Madhusri Shrivastava

From: Group 8
Subject: Submission of case analysis report

Dear Ma’am,

This document is submitted in partial fulfilment of the WAC course and contains our analysis
report on the case “Against the grain: Jim Teague in Tanzania (A)”, as our official
submission towards the group-assignment component. It follows the standard WAC structure
as discussed in class and tries to critically evaluate the various options the protagonist has
keeping certain criteria in mind. In case the need arises, we would be happy to clarify any
point or argument made by us in this report.

Yours sincerely,
Group 8 - Section G

Executive Summary

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This report addresses the dilemma faced by Jim Teague, a socially conscientious Harvard
summer intern at AgriFund, a social investment fund with respect to the sanctioning of loans
to projects in Tanzania. He is torn apart on financial, societal and socio-environmental
grounds on whether to sanction the loan to KiraFlour - a small scale milling company. While
he has developed a strong relationship with the owners of the firm and this deal will benefit
450 farmers, the company has been issued notices about an E-Coli health hazard and
unlicensed products. The report analyses the various options before Teague against various
criteria and aims to identify the best path for him to move forward on.

Contents

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1. Situation Analysis
2. Problem Statement
3. Options
4. Criteria for Evaluation
5. Evaluation of Options
6. Recommendation
7. Plan of Action

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 Situation Analysis

Jim Teague is a summer intern at AgriFund - a social impact investment fund, responsible for
the financial management of 5 agro-processing firms in northeastern Tanzania. A former
mechanical engineer, Jim left his job in design to add value to society - a path that took him
to HBS and the internship.

He develops a deep personal relationship with Albert ‘Baba’ and Mama Kiravu, owners of
KiraFlour, an ideal candidate to receive an agro-processing loan from AgriFund, with its
greater market presence and high-quality flour. During one of the many meetings Baba
confessed that his major product Flour had allegedly tested Positive for E.Coli via TCA
(Tanzania Certification Agency), but he also added that this was an attempt for bribery - in
which he was unwilling to participate . A similar conversation ensued when the Tanzanian
Food Authority (TFA) send them to notice regarding unlicensed products - eligible for fines
and bans.

A personal experience with a Tanzanian police officer who illegally caught him and released
him after being bribed and his outlook of his new environment led him to believe Baba.
However a eye opening talk with a friend back home makes Jim inform his boss Mr. Allen
Sweatman of these new developments post which he is given a week to further investigate
and make a final recommendation. A week during which he finds an obvious contamination
source in manure and is majorly conflicted about his pending decision.

Problem Statement

In light of all the financial, societal and social concerns regarding the AgriFund’s projects in
Tanzania, what recommendation with respect to the sanction of the loan to KiraFlour should
Jim Teague make to Allen Sweatman?

Options

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 ● Sanction the Loan to KiraFlour: Ignore the health and licensing regulatory notices and
recommend Mr. Allen to disburse to funds to KiraFLour

● Don’t Sanctioning the Loan: Take strict cognizance of the violations and non
compliance to health and licensing regulations and recommend Allen to sanction the
loan to one of the other 4 projects if at all.

● Middle Ground - Stay and Assist: He asks Mr. Allen for an extension to the deadline
and works with the Kiravus to resolve all the issues with their company in order to
secure the loan for them.

Criteria for Evaluation

1. Societal Responsibility: Health-safety issues can arise in the region as per the TCA
notices with the potential spread of E. Coli to all the consumers of Kira Flour’s leading
product.
2. Social: Many people are dependent directly or indirectly on Kira flour for their living.
Withdrawing the investment could put poor farmer’s and Kira Flour’s employee livelihoods
in jeopardy.
3. Personal Relationship with Baba and Mama Kiravu: In short time Baba Kiravu
became Jim’s Friend and mentor, while Mama Kiravu had developed a motherly bond with
him.
4. Financial Risk: There are health and licensing issue with KiraFlour and giving loan to
them at such critical time could potentially put Agrifund to credit, litigation and reputational
risks. Non compliance with TFC norms can lead to fines and bans as well.
5. Morality and ethos: As someone who left his job to create value in society, the choice he
makes must be in alignment with hos core ethos and moral principles.
6. Career Progression: Jim is about to start his managerial career in the socio-agricultural
domain and he doesn’t want to put his first foot in the wrong place. His decision needs to
safeguard his company’s interests and further his own career.

Evaluation of Alternatives

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Serial No. Options for Evaluations Sanction No Middle
Sanction Ground

1. Societal Responsibility ( No Perilous impact × ✓ ✓

on the health of 1000s of KiraFlour
consumers)

2. Social: Consideration of the livelihood of ✓ × -

the 450 farmers

3. Relationship with Baba and Mama Kiravu ✓ × ✓

4. Minimal Financial Risk of Loan Default × ✓ ✓

5. Morality and ethos of Jim Teague × ✓ ✓

6. Career progression of Jim Teague × ✓ -

Sanctioning the Loan : This means that you let the flour which potentially contains harmful
E. Coli to enter the market and cause a potential threat to 1000s of consumers. Given that he
always wanted to create value for the society, this will counter his own value system because
lives of so many are at stake. Sanctioning the loan will boost the livelihood of 450 farmers,
but as a an intern to the organisation he will fail but putting the company in financial and
reputational risk in case of fines and shut down due to licensing non compliance.

Not Sanctioning the Loan: His own value system and goal of company had society value
creation to its core and with this option he will choose something which seems to be more
ethically correct. As he had himself seen the cow manure being used by farmers and
according to previous findings E.Coli O157:H7 is hazardous for health, he cannot risk the
health of thousands of consumers. He will also save the organisation from financial and
possible reputation losses. This might mean endangering the bonds he made with mama and
baba Kiravu, and possibly putting the sourcing farmers in debt. He will then need to select
one of the other 4 companies for the disbursement of the loan.

Middle Path - Stay and Assist: He continues to have good relationship with Mama and
Baba Kiravu while not putting his company at risk. At the same time he will be ethically

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correct by not riskings lives of thousands. But he has already been interning for a month. This
option does not seem feasible as he does not have the time, power in terms of autonomy as
well as the knowledge to implement this.

Recommendation

We recommend that Jim Teague go with the option of Not Sanctioning the Loan as it best
resolves his financial, social and societal concerns about the deal. While Middle Ground
option looks attractive initially, we believe it will not be practically possible for Jim Teague
to execute it.

Plan of Action

Jim Teague has to firmly, yet kindly inform Baba Kiravu that the company will not be able to
finance his business. Jim needs to acknowledge Baba has valuable experience and and a
genuine commitment to creating opportunities for his employees and business alike, and even
his corruption claims might be true. However given the Tanzanian Certification Agency's
(TCA) report of E.Coli traces in KiraFlour's most popular product and the distribution of non-
TFC (Tanzanian Food Commission) licensed flours, his company cannot take the risk of
funding KiraFlour. Being an investment company, any project that has the risk of being fined
or shut down by Government Regulatory bodies is a strict no go for Agri Fund.

Eventually, he should inform Allen Sweatman that the company shouldn't sanction the loan
to KiraFlour. Since giving a loan to KiraFlour is a bad idea, Jim has to invest time in
assessing the capital needs of the other four agro-processors and identify the best suitable
amongst them for AgriFund to finance in order to create financial, social and environmental
value with their clients.