The Hill District Urban Redevelopment Project: Revitalization Victory or Community Breach?
Dwelling House Savings and Loans (DHSL) was dealing with the aftermath of the financial crisis that hit the Hill District community. Since the Hill District community constituted most of its customers, DHSL experienced a drop in deposits, increased requests for loans, and a spike in loan delinquency. Because of the high number of default loans, DHSL was under pressure to secure FSLIC insurance to avoid shutting down. At the time, DHSL had $13.4 million in assets and $13.8 million in deposits but had taken on more than $3 million in unrecoverable debt. As such, DHSL needed to meet federal (rather than state) standards for FDIC insurance coverage, which required a minimum of $30 million in total net assets. DHSL management had to decide whether to keep fulfilling its core mission of providing affordable mortgages for the Hill District or change its mortgage policy to raise the required funds needed to prevent a shutdown.
- Identify the stakeholders and their interests in this case
- Examine the competing pressure that businesses encounter when making decisions
- Recognize the notion of “stakeholder salience” as a tool for effective stakeholder management
- Explain the servant leadership characteristics and their application in this case
- Analyze the issues facing DHSL and present alternative solutions that will help it tackle its short-term financial problem in a manner that does not compromise its commitment to social responsibility
- Recommend a solution from the alternatives presented or suggest a new alternative with justification
Application: The case is most appropriate for teaching leadership, stakeholder management, social responsibility, and ethics.