Corporate Governance & Ethics Issues - Assignment Example

Name: Tutor: Course: Date: A case study Question 1(a) Business ethics are the moral values that are accepted in the corporate world. All businessmen and corporations have an obligation to abide by these values. This ensures that there is no conflict between the players in the market. It also ensures that any conflict arising have a defined solution. It is business ethics that enhance respect while competitors face each other. Business ethics are generally the morally accepted values in the society. They define the conduct of both the individuals working in firms and the firms themselves as the entities. Failure to abide to the stipulation of business ethics could cause one to be sued. This ensures that they pay the damages accrued to their act or the injunctions as stated by a court of law. It is extremely crucial that individuals and firms abide to business ethics. This is because violation of these ethics could ruin the reputation that they hold. Consequently, this implies that they could loose their market share as their good will deteriorates with every misconduct. Upholding business ethics ensures that accompany or a firm attains its set goals and objectives. This leads to success of the business. It also ensures that consumers are satisfied with the services provided by the firm. This is because business ethics narrow down to quality service provision. This is because firms and enterprises are bound by business ethics in terms of the products that they avail in the market. Therefore, it is beneficial for both the firms and the consumers when business ethics are adhered to at all times. Question 1(b) Business ethics is a function of personal ethics. This is because the individuals in an organization are the people who have to abide to business ethics. An organization’s employees running down from the top management need to have eloquent personal ethics in order for the company at large to be in a position to abide to the stated business ethics. This means that the employees need to have good moral values since the business is dependant on them in order to abide to other business ethics. An organization needs to ensure that they recruit people who have good personal ethics. This will ensure that the same is transferred in their work. As a result, they will be able to abide business ethics. This needs to be the case especially for the management. This is because they are the leaders who are to be emulated by their subordinates. This is as provided by the concept of ethical stewardship. In any organization, there are leaders who are incorporated in the management of the firm. They have the responsibility to carry out the managerial functions effectively and efficiently. They should be in a position to implement their leadership skills in performance of their duties and responsibilities. Leadership and management may appear to have the same meaning, but this is not the case. For effective management, one requires leadership skills in order to gain confidence and trust from the people served. As the proverbs goes, unity is strength”, the same applies to people working together in achieving the same goal. A good and successful leader should also be decisive in his entire decision making process. This goes hand in hand with self confidence even in the most difficult situations. This helps to instill confidence in the subordinates even when things are tough. A leader should also exercise humility and should occasionally take some time off to socialize with his followers in order to maintain a good working relationship with them. He should be able to work under pressure as showing any signs of weakness to his competitors would negatively impact the progress of the firm. A good leader will have some interest in the happenings both inside and outside so that they can effectively analyze the competition. (Moyles 2006, pp 28). Trustworthiness in the running of a business is central to its success. This implies that there is need to build trust in an organization. This applies to all the individuals taking part in the running of a business or firm. In an organization, for example a company or corporation, the management act as agents of the owners. They are bound together by the principles of agency theory. Therefore, the shareholders will need to trust the directors of the company. On the other hand, the directors will need to act as trustworthy individuals. This will ensure that there is a smooth running in the activities of the firm. It will also ensure that they are no misunderstandings that are bound to damage the image of the corporation. (Hill 124) Trust should also be built between seniors and juniors. This is especially so because of delegation of duties. A manager, for example, should trust his juniors so as to be able to delegate duties to them. This will enhance his fulfillment of his directing function in a firm. Juniors should be trustworthy. This ensures that they always act in the best interest of the company. By doing so, they work together towards achievement of the set goals and objectives. Enhancing trust in an organization helps the individuals in their quest to abide to business ethics. Trustworthy individuals always ensure that they accomplish the set goals and objectives in a firm. Studies have indicated that leaders who are termed as being ethical stewards tend to have committed followers. This is because the leader earns trust in the employees and they follow whatever choices he or she makes. (Caldwell et.al, 2008) This implies that all leaders should implement ethical stewardship form of governance in order to achieve the set goals and objectives. It has also been noted that successful team leaders are those who are ethical stewards. This is because leaders have a great impact on the direction and general perception of the team members or followers. (Dalkir 189) Ethical stewardship, leadership and trustworthiness go hand in hand. A good leader is one who is ethical and trustworthy. Such a leader is goal-oriented and many re the times he achieves his set goals and objectives. Team leaders have great influence on the members. This implies that it is necessarily for these leaders to be credible and trustworthy. This will ensure that the team feels secure under that leadership. This can only be achieved through the continued conformity to ethical standards. Eventually, respect will be earned and efficiency in the performance of duties and responsibilities will be enhanced. Gradually, the organization will be reaping the benefits as the goals of optimization are achieved. Question 1(c) Ethical dilemmas and ethical issues are different. This is because ethical dilemma causes ethical paradox where two situations may be conflicting. Ethical issues on the other hand are clear and not confusing. They are independent of other issues in the organization. This result from violation of moral issues and ethics accrued to the society. Question 1(d) In Nine Carat Limited, there is an ethical issue arising because of the illegal kick backs. This arose during the acquisition of land in the company. This an ethical issue because it is related to fraud and embezzlement. This does not create any paradox. Moreover, an overview of the records would indicate that there was fraud. This is because they are benefiting from the company’s funds wrongfully. It is an ethical issue because their actions are not acceptable by the company. Moreover, their actions wee not done in the open. This is because if they were done openly, everybody would be aware and the funds would be traced back to the company’s bank account. Question 1 (e) There is an ethical dilemma in Nine Carat Limited. The ethical dilemma that is presently troubling the organization is the fact that during the recruitment process, the employees who have embezzled funds in the company were rated as being of high personal ethics. It is an ethical dilemma because their grading is not depicted by their actions. A paradox has been created because of the fact that these employees are currently involved in a fraud because of embezzling company funds. Question 1 (f) In order to become socially responsible, Nine Carat Limited should heed to four steps already established towards an eloquent corporate social responsibility strategy. These steps include philanthropy, pet projects, propaganda and partnering. These are the contents of the Corporate Social Responsibility benefits matrix. These four contents ensure that the strategy implemented in the company is beneficial to both the society and the organization. Therefore Nine Carat Limited needs to ensure that it follows the stipulations of this matrix before coming up with ay major decisions. The managers of the company in charge of the CSR of the company need to have the necessary knowledge to ensure that they choose the strategies that are best sited for the company. A good manager should be knowledgeable and competent so that he can effectively influence and direct his subordinates. He must strive to practice integrity and honesty always. This is because a manager and should be a role model to the rest by exercising good values and ethics. Moreover, manager should be courageous and not afraid to take the initiative. He should be a go- getter and should grab opportunities as they arise rather than sit waiting for them to drop on his lap. This will help him to push the organization to a higher level and he will always be one step ahead. He also ought to possess good and fluent communication skills. This is to allow him to communicate his business ideas clearly to his subordinate, for implementation. Motivation skills are also important for a manager to posses at all times. This is because he will constantly need to motivate demoralized workers into continuing to work. A good manager needs to constantly motivate his team to put more effort in their expertise in order to complete a task successfully. (Clark 2009, pp86) A good and successful manager should also be decisive in his entire decision making process. This goes hand in hand with self confidence even in the most difficult situations. This helps to instill confidence in the subordinates even when things are tough. A manager should exercise humility and should occasionally take some time off to socialize with his followers in order to maintain a good working relationship with them. He should be able to work under pressure as showing any signs of weakness to his competitors would negatively impact the progress of the firm. A good manager will have some interest in the happenings both inside and outside so that they can effectively analyze the competition as well. (Hajdini 2010, pp 102) No manager is expected to possess all of these traits however they can acquire them through training and discipline. A good leader needs to have the capacity to make and develop a team of people and lead them effectively to achieving the business goals. Nevertheless, there are so many known traits of a good manager in books and other sources that cannot all be exhausted. The crucial factor in picking a manager besides the academic credentials is choosing someone who can be a leader and someone who has proved their commitment to the organization. |This can be established by reviewing their work record while in a junior position. For example, someone who was lazy and did not yield good results as an assistant manager cannot be expected to start working when they are promoted irrespective of their academic credentials. Therefore, managers are people who can take the company to the next step at all cost. (Huber 2006, pp 90) Question 1(g) Every company has a social responsibility in regard`s to society at large. However, not all companies assume their responsibilities as expected. Conforming to social responsibility issues is one way of adhering to business ethics. This is because an entity has the responsibility to ensure that it carries out itself in manner that is society friendly. Conforming to these responsibilities is one way of giving back to the community that enables a business or corporation to grow and develop tremendously. (Crowther & Capaldi 27) Nine Carat Limited should also be at the forefront in ensuring that the company enhances ethical stewardship in its activities. Ethics stewardship should be enhanced in any organization. Competent leaders conform to business ethics and other moral values and hence viewed as ethical stewards. Ethic stewardship is achieved through the leaders of an organization. They do this through their actions. This is because their followers tend to watch what actions they are taking when faced with particular situations. Eventually, this stewardship is transferred to the followers. This ensures that the company is able to achieve it goals and objectives. In the process, the company’s goodwill appreciates and the management enjoys a large market share. Ethical stewardship also narrows down to genuine products. This implies that the company strives to conform to set standards in regards to its goods and services that it offers in the market. Eventually, the company has gained a pool of royal customers. This has been one of the strategies that the company has implemented in ensuring that it remains at the top in its field. This also means that consumers are satisfied with the quality of services that the company offers. (Caldwell 2008, pp 157) PART 2 Question 2(a) Stakeholders are people who hold any form of interest in a project undertaken by a company. There are divided into two dependant on the type of relationship that these individuals or groups of individuals have with the project in question. Primary stakeholders are the people or groups of people who are directly affected by the outcomes of certain projects or programs that are undertaken by an entity. Secondary stakeholders, on the other hand, are those people or groups of people who are indirectly affected by certain outcomes of projects or programs undertaken by companies. (Ferell, Fraedrich & Ferell 52) In the case of Broadway Corporation Company, the primary stakeholders were the employees and customers who highly depended on the company’s products. This is because the projects undertaken by the company directly affected them. For the employees, the success of these projects meant that their jobs were still intact and secure. On the other hand, if they turned out to be a failure, it meant that they would loose their jobs. Subsequently, this meant that they had no source of income. This would lead to poor standards of living as income is directly proportional to societal and individual welfare. For the customers, they expected to access the video games that they loved very much. Lack of availability of these games is detrimental to the customers. This is because some of them could be addicted to them. As for others, it is their way of spending leisure time. Lack of these video games would, therefore, mean that they would have to look for alternative ways of spending their leisure time. Therefore, these stakeholders had a direct interest in the projects initiated by Broadways Corporation. (Ferell, Fraedrich & Ferell 52) The secondary stakeholders were the media, the Taiwanese Joint Venture Group and the society at large. This is because the society had an interest in the video games that were introduced in the market. This is because the society has a duty to ensure that moral values are upheld through undertaking by an individual or a firm. The media has a duty to pass on information to the public on the on goings around their environment. This means that the undertakings of Broadways Corporation were part of their duty to fulfill. Question 2 (b) Stakeholders have a role in business ethics. This is because they have a particular interest in the project at hand. Therefore, it is their duty to ensure that the managers in charge of the project adhere to the set business ethics. This will ensure that the project pulls through as expected. Failure to abide by these ethics implies that the project may end up failing. In the case of Broadway Corporation, it is evident there is an ethical issue at hand. This is because of the new video game ‘Lucky’. The video game includes scenes of nudity. This implies that moral values are being violated if young underage children are exposed to such a video game. This implies that the stakeholders have a duty to ensure that this video game is withdrawn from the market. The customers, who include parents, should ensure that they raise concerns with the management on the suitability of this video game that is already circulating in the market. (Ferell, Fraedrich & Ferell 52) They also have a role of ensuring that policies are formulated for implementation in the company for future reference. These policies should ensure that such products are not released in the market. This will also ensure that future managements are well guided on the production of such products. Violation of the stipulated policies should be accompanied by dire consequences. These will ensure that this ethical issue is not repeated in any time during the future of the company. Question 2 (c) The proposal by Brad, the president of Broadways Corporation, to go with the nudity idea on the video game ‘Lucky’ was completely unethical. This is because he clearly understood the risks of unethical behavior and immorality in society. However, he seemed blinded by the profits that he would gain from the venture. He was facing an ethical dilemma. The fact that he is the leader of the organization implied that he had leadership responsibilities. He was not forging ethical stewardship in the organization. On the contrary, he was forsaking all that had been achieved by his subordinates. He was not leading by example. His leadership skills are greatly questionable. (Ferell, Fraedrich & Ferell 52) Also, the fact that he was willing to release the product in a foreign market is a strategy that was indication of dumping. This implies that the president was being unethical through his business malpractices. This also frames him as being completely out of line. A good and successful leader should also be eloquent in decision making and ensure that he remains ethical while doing so. This goes hand in hand with self confidence even in the most difficult situations. This helps to instill confidence in the subordinates even when things are tough. A leader should also exercise humility and should occasionally take some time off to socialize with his followers in order to maintain a good working relationship with them. He should be able to work under pressure as showing any signs of weakness to his competitors would negatively impact the progress of the firm. A good leader will have some interest in the happenings both inside and outside so that they can effectively analyze the competition, as well. (Ferell, Fraedrich & Ferell 52) PART 3 Question3 (a) The ASX Corporate Governance principles and recommendations are laid out clearly for companies to adhere to at all times. Principle one states that companies must lay solid foundations for management and oversight. Under this principle it is recommended that companies lay out the duties of the board of directors and those of the top executives. They should also disclose the methods implemented in performance evaluation of top executives. Principle number 4 entails safeguarding integrity in financial reporting. Principle 6 states that the rights of shareholders should b respected. This is as provided for in agency theory. Question 3(b) Agency theory refers to the relationship between owners of accompany and the shareholders. The managers in the company are agents of the shareholders. They have a duty to ensure that the shareholders do not suffer losses. This is as given by principle 6 of ASX principles and recommendations. (Bowie & Freeman 79) Stakeholder theory narrows down to corporate social responsibility. Each company has a duty to ensure that it adheres to CSR through their actions in business. This is because they may directly affect the primary stakeholders or indirectly affect the secondary stakeholders. This is taken care of under principle 1 ad 4 of the ASX principles and recommendations. (Phillips 17) Works cited Caldwell, C., Hayes, L., Bernal, P. & Karri, R. (2008). “Ethical stewardship- Implications for Leadership and Trust”. Journal of Business Ethics. Vol 78(2) pp. 153-164. Moyles, John. Effective Leadership and Management in the Early Years. New York: McGraw-Hill International, 2006. Kaptein, Peter. Ethics management: auditing and developing the ethical content of organizations. New York: Springer, 1998. Dalkir, Kevin. Knowledge management in theory and practice. Boston: Butter-worth-Heinemann, 2007. Hill, Carol. & Jones, Grace., Strategic Management Theory: An Integrated Approach, New York: Cengage Learning, 2009. Hajdini, Indies Innovation Management: The Leadership Role of the CEO: Case Studies: Yahoo and Google. GRIN Verlag, 2010 Ferell, O., Fraedrich, John. & Ferell, Linda. Business Ethics: Ethical Decision Making and Cases. New York: Cengage Learning, 2009 Crowther, David & Capaldi, Nicholas. The Ashgate research companion to corporate social responsibility. London: Ashgate Publishing, Ltd., 2008. Phillips, Robert. Stakeholder theory and organizational ethics. London: Berrett-Koehler Publishers, 2003. Bowie, Norman & Freeman, Edward. Ethics and agency theory: an introduction. New York: Oxford University Press, 1992. Read More