Ethics and Firm�s Goals

Ethics and Firm�s Goals - considered unethical...

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Ethics and Firm’s Goals Although firms should not participate in illegal or unethical behavior is can conflict with the goal of a corporation because the goal of a corporation is to maximize shareholder wealth or current value of stock (p.11). Companies often engage in practices that are legal but not necessarily ethical for instance moving a company’s operations to a country that has no corporate income taxes to gain shareholder wealth. It is not illegal but probably not ethical. Also there is outsourcing, companies outsource to different countries simply to take advantage of lower wage costs. This is not illegal but it could be
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Unformatted text preview: considered unethical because of the amount of U.S. jobs that are lost because they require more money to perform the same task. However, this practice has created millions in terms of shareholder wealth or rises in stock. Trying to conduct themselves in a legal and ethical manner complicates the agency problem because shareholders want to do whatever they can to ensure that the company is maximizing wealth by keeping costs low and increasing profit. Acting ethically may cause companies to not perform or engage in certain activities that may be more costly or may not produce the desired results wanted by the shareholders....
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