They view American business officials to be greedy and many of their jobs just consist of helping businesses find their way around the laws. Frohnen and Clarke then conclude their essay with suggestions on how to change business ethics with education and simply being honest (113-119). Then, in Jeffrey L. Seglin’s essay, “Just Because It’s Legal, Is It Right?” he reveals his perspective on corporate America. Seglin argues that different sides give way to different views of the law. Then, he goes on to emphasize that laws are just pardon from having to think and do your job right.
Corporate governance arise whenever a company’s ownership separates from management, because managers, as Adam Smith mentioned in his “ The Wealth of Nations”, can not well expected to watch over shareholders interests as serious as over their own. As such, the board is introduced to make sure the management works on the best interests of the company in the long run by monitoring and regulating managers’ performance on behalf of shareholders. If the board does not response or only wants to be pacifist in case the management does wrong, the shareholders’ interests will be inevitably damaged as what happened in Loewen’s case. There are some examples we can take from Loewen’s to demonstrate how the management fails to fulfill its commitment to the shareholders: • Used improper accounting practice Loewen used an improper accounting practice to book its pre-need sales. After the customers made a down payment, Loewen started to recognize the customers’ purch... ... middle of paper ... ...hairman and CEO, who may have his own interests other than other shareholders.
Furthermore, he believed that any corporation assuming a more socially responsible attitude would be met with economic limitations, rendering them less competitive in the market area (Friedman, 1970). R.E. Freeman’s ‘Stakeholder theory’ is often seen as a better alternative to Friedman’s ‘Shareholder primacy theory’. Both the Stakeholder theory and Shareholder theory are normative theories explaining what a corporations social responsibilities ought to be and both adopt a similar stance on management’s accountability (Smith, 2003). However, the Stakeholder theory states that a manager’s duty is not only to focus on shareholder’s interests, but also to balance them against the interests of the company’s other stakeholders.
In effect, companies are moving from the hierarchical and bureaucratic model of organization that has defined corporations since World War II to what can be called the task-driven organization where what has to be done governs who works with whom and who leads. But while senior managers understand the necessity of change to cope with new competitive realities, they often misunderstand what it takes to bring it about. According to Beer and Eisenstat (1990), an approach to change based on task alignment, which starts at the periphery and moves decidedly toward the executive board, is the most effective way to achieve long-lasting organizational change. It is not that change can never be originated at the top, but it is not the common thing and too risky as a strategy by default. What usually happens when a certain change program does not provide the expected results is that another program is to be implemented.
Ethics and Big Business It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically. Morris defines morality as that aspect of our nature which strives for goodness, and he stresses that most people have misunderstood this dimension of human life. After searching through miles and miles of quotations, Morris came to the conclusion that most people's attitudes about ethics and morality were basically negative. That is, that morality was somehow put into place in order to prevent us from really enjoying life.
The corporate governance framework should ensure the company’s strategic guidelines, effective monitoring of management by the Board, and the accountability of the Board to the shareholders and the company. Corporate governance as involving a set of relationship between a company managements, Shareholders, Boards of Director and monitoring company’s performance. Governance is about seeing that it is run properly (Professor Bob Tricker, 1984). Malaysia start the code on Corporate Governance ... ... middle of paper ... ...ebate on separation of powers by severe the position of the chief executive directors and the chairman, due to huge power that could be centered in a single person having the two positions. Excessive Business Risk Taking and Lack of Risk Control To taking higher business risk, investors are expected higher rewards to compensate.
Corporate governance has become an issue of worldwide importance. Corporations have a role to play in promoting economic development and social progress therefore they must have the best members on the board to assure good standards. Board members and directors should possess certain characteristics that will allow them to make good decisions for the firm. The appropriate characteristics should be possessed by each c... ... middle of paper ... ...lling away from the company. This new Nasdaq rule is suppose to make investors and the public aware of what is happening with the company weather its conflict of interest or other corporate abuse.
Basically what Friedman is saying is that when the government gets involved in social responsibility they waste so much time and money and the process is way too long to get anything done. Friedman stats that it would be a lot easier if businesses could go in and solve their own issues ... ... middle of paper ... ...cker, Murphy, and Friedman questioned the legitimacy of connecting anamorphic characteristics, such as moral and social judgment and duties, to an intrinsic body. This is not to say that they promoted immoral conduct by company employees or owners. Rather, they offered a supplemental, more rational way to oversee their behaviors; they did this by laws and the utilization of professional codes of conduct (Murphy, 2009). Business ethics imply the concept of social responsibility through ideas that remain divergent.
(Jennings, 2009) Unfortunately, there was a darker side to the FM story. Corporate executives choose to focus on corporate goals and meeting the market expectations, ignoring any moral issued witch conflicted with the attainment of their goal. (Jennings, 2009) To understand the reasons the reader needs to be aware of several pieces to the FM situation including: 1) ethics and social responsibility, 2) the importance of devolution, 3) the power and value of incentive plans, 4) the rational for... ... middle of paper ... ...be it Enron or Nazi Germany, can be a result of individuals that do not question authority. Conclusion It is clear in reviewing the FM case that the corporate executive’s personal morals were overrun by their desire to attain personal incentives and bonuses. Lack of internal controls allowed the executives to control what was reported to ensure the goal was attained.
He essentially is saying that Corporate America is taking the students and teachers out of the education system, just like they take the people out of business. In other words, big business is convoluting the system so that the nuances of the teaching and learning process are practically eliminated. Creating students who understand and can apply the material should be the goal of the education system, not creating mindless drones to fulfill the roles corporations wish to force people into. Hedges makes a strong point to say that our nation today does not reflect what our forefathers set out to establish. They wanted informed citizens who could get a strong job that provides both financial and emotional stability and happiness.