PETCOs Effective Ethics Program - Essay Example

The strategic move of re-privatizing will help the company in certain aspects, but it will also have bad consequences. One of the benefits of going private is that company does not have to comply with SEC regulations including the Sarbanes-Oxley Act which costs millions of dollars a year to comply with. Becoming private increases the power of the ownership team. Some of the cons of not being public are the inability to raise capital in a liquid marketplace such as the NYSE or NASDAQ. I thought that the company acted unethically and did not comply with the FDA mandate when they re-privatize because by not being public they were not obligated to comply with the demands of the FDA. Private companies are not able to build as much goodwill as publicly traded companies.
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I believe that PETCO’s reputation covers its entire supply chain. When a breeder they do business with mistreats animals it reflects badly on the image of the company. The firm has to drop the supplier to help them fix the problem to comply with state regulations. The scandal associated with unsanitary conditions at a PETCO warehouse reflected on the company. The company also did not react quickly enough the fix problems as the firm’s stakeholders expected. The company in the future has to react faster to issues that can hurt its corporate image. Read More