Unformatted text preview: e owners with property rights,
and in that managers as stewards
are obliged to look out for owners’
interests. Many times, doing what
is right is consistent with maximizing the stock price, but what if
integrity causes a company to lose
a contract or causes analysts to
reduce the rating of the stock from
“buy” to “sell”? The objective to
maximize shareholder wealth
holds, but company officers must
do so within ethical constraints.
Those constraints occasionally
limit the alternative actions from
which managers may choose.
Some critics have mistakenly
assumed that the objective of maximizing shareholder wealth is
somehow the cause of unethical behavior, ignoring the fact that any
business goal might be cited as a
factor pressuring individuals to be
U.S. business professionals
have tended to operate from within
a strong moral framework based
on early-childhood moral development that takes place in families
and religious institutions. This
does not prevent all ethical lapses,
obviously. But it is not surprising
that chief financial officers declare
that the number-1 personal
attribute that finance grads need is
ethics—which they rank above
interpersonal skills, communication skills, decision-making ability,
and computer skills. H-P is aware
of this need and has institutionalized it in the company’s culture
and policies. Clearly, considering such questions before taking an action can help to
ensure its ethical viability. Specifically, Cooke suggests that the impact of a proposed decision should be evaluated from a number of perspectives before it is
1. Are the rights of any stakeholder being violated?
2. Does the firm have any overriding duties to any stakeholder?
3. Will the decision benefit any stakeholder to the detriment of another
4. If there is detriment to any stakeholder, how should this be remedied, if at
5. What is the relationship between stockholders and other stakeholders?
Today, more and more firms are di...
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This document was uploaded on 01/19/2014.
- Fall '13