Business Ethics
Taking a decisive action to either document a slow moving stock or not in the end of year account could prove a difficult decision to take. It is a legal requirement for the chief financial officer to provide an honest and accurate account and more so in cases where the company is to be sold (Gellerman, 1986). If the slow stocks are not included in the account, there is a chance that the buyer interested in acquiring the company would never find out after buying the company. In addition, in favor of the workers, they could be retained, and in some cases get a pay rise. By this, even when the issue comes up later down the line, it would be resolved without anyone getting hurt in the process. On the other hand, refusing to generate falsified end year accounts would be the ethical way to go. With it, however, the chief financial officer stands at risk of losing their job. Another outcome is that the company will not sell as the shareholders expect which should annoy them greatly and several people will have to answer to the slow stock issue as well.
The solution to this challenge would be to indicate the right stocks in the end year reports so that in the coming year, the right steps can be taken to solve the problem before the company can be for sale. That way, the financial officer will have upheld integrity as is required. The rationalization outlines an activity as safe because it will never meet the public's eye is mistaken in this case (Guthrie, 2012). There is no guarantee that the truth will not surface at a later time. Another assumption is that making a decision for the good of the company and in the interest of self is a reason to defy ethical rules is misleading. Even for decisions that help the company, moral rules still apply.
Cooperate Social Responsibility
The stockholder theory asserts that the corporation has the sole responsibility to make and maximize profits. According to this theory, any engagements in responsibility to parties other than the stockholders should only be as directed by the law and must be in the interest of the shareholders altogether. The stakeholder theory adds some humanity to the rather cruel stockholder theory. The theory accepts all stakes as equal and the aim, therefore, is to strike a balance amongst contending stakes. A stakeholder is considered to be any party benefiting from or getting harmed by the activities of the corporation (Mason-Riseborough, 2003). The theory adds the responsibility of the stakeholder on the corporation, in essence, saying that a corporation has a social duty as well as a financial duty.
The stakeholder versus shareholder war is evident when construction or mining companies have to compensate the landowners for evictions or damages caused by their work. Many businesses are reluctant to do so citing a loss to the shareholders. By that reason, they are willing to infringe on the rights of others. Without laws to enforce the rights of the less fortunate victims, there would be a lot of harm done (Trudel & Cotte, 2008). The stakeholder theory is the most suitable. It allows companies to participate in strengthening the moral fiber of the society. That way peace and harmony can prevail. There is no more harm to stakeholders. Instead, they all benefit from the firm. Moreover, the entire society gets to benefit including other corporations that depend on the one under question.
References
Gellerman, S. (1986). Why “Good” Managers Make Bad Ethical Choices. Harvard Business Review. Retrieved 2 February 2017, from https://hbr.org/1986/07/why-good-managers-make-bad-ethical-choices
Guthrie, D. (2012). Paying More Than Lip Service to Business Ethics. Forbes.com. Retrieved 2 February 2017, from http://www.forbes.com/sites/dougguthrie/2012/01/31/paying-more-than-lip-service-to-business-ethics/#63fb755f750c
Mason-Riseborough, G. (2003). Stakeholders and Stakeholder Theories: An Analysis. Geocities.ws. Retrieved 2 February 2017, from http://www.geocities.ws/griseborough/55.htm
Trudel, R. & Cotte, J. (2008). Does Being Ethical Pay?. Wall Street Journal. Retrieved 2 February 2017, from https://www.wsj.com/articles/SB121018735490274425
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