Keep in mind that proper APA and good grammar are expected in all discussions. P

Question

Keep in mind that proper APA and good grammar are expected in all discussions. Please see the APA template that I have in announcements for the proper format of in-text citations and references.

The length of your initial posting must be at least 200 words and at least one outside source is expected for support. Your response must be on time and within the prescribed length.

Respond to the ideas, not the person. Justify your position or provide examples. Just agreeing will NOT get you a pass. Your combined length for peer responses should at least 100 words. Use critical thinking and add value!

Do not be afraid to use the UMUC library database for support: http://sites.umuc.edu/library/index.cfm

Learning Activity #1

You work for a family owned business that does financial advising. You are the senior advisor of high net worth clients and you are expecting to be promoted next year, if the business is able to go public. You are asked by the CEO to ensure that the returns for your clients show a 20% gain so that when the company goes public it will receive a premium offering. The only way for you to show the 20% gain is to delay your reporting to your clients of recent losses to their portfolio until after the public offering. You stand to make a great deal of money with your promotion and stock options when the company goes public. While not illegal, it might be considered unethical in light of the fiduciary responsibility that you have to your clients. What are the ethical implications and what ethical theories are involved? Use course content and outside research to support your discussion.

Learning Activity #2

To respond to recent flat sales growth, as well as serious needs for cost reduction and meeting analysts' expectations, Leslie Cosmetics is considering a strategic plan to expand into Asia. To facilitate this plan, the CEO of the company proposed offshoring and outsourcing some business operations, as well as downsizing the company's current social programs. Various stakeholders will be affected by this plan. As a senior manager in this organization who has parents that are dependent on the social programs that the company provides to the local community, what do you think about the shareholder vs. Stakeholder debate? Which side of the debate are you on and why? Use course content and outside research to support your discussion.

Explanation / Answer

Learning Activity 1

Lying happens to be one of the most common forms of wrong doing in the world. Although people might be aware that they are commiting a mistake by lying, sometimes it needs to be done for the greater good or for ones own happiness. Situations such as these, lead to ethical dilemma for the person involved, who needs to make a choice between lying or telling the truth.

Ethics are a set of principles that govern a person's behaviour or conduct.

The various ethical implications involved are explained as below :

Scenario 1:

- You(Senior Advisor) decided to be honest with your client and state the truth about their losses, you may end up gaining the trust and belief of the client. If you succeeded in reversing the client's losses, you may end up gaining a faithful client for life. Plus, the client may speak positively about you to others which will ensure more clients for you in the future.

Scenario 2:

- You(Senior Advisor) decided to withhold the information about the losses from your client and decided to disclose it at a later stage. In such a scenario, you may receive the promotion and be satisfied at your new role, but once the client realises that he has been deceived, there can be various negative repurcussions of your decision.

Since, this was a high profile client, you may end up losing a lot of business as a result of upsetting this client. Also, this might lead to a negative image being created about your firm in the market due to word of mouth.

The ethical theories which could be involved are:

- Consequential (Utilitiarinism) Theory:

This theory supports the belief that the consequences(utility/value) of a particular decision/action should be weighed in before doing something right or wrong.

Essentially, this theory advises that you should take the decision which leads to higher number of good consequences. So, applying this theory to the above situation will involve assessing which decision ( informing the client/withholding the information) leads to better consequences for people around you and accordingly follow the results.

- Deontologism Theory:

This theory believes in following the set of actions which are deemed to be universally right and to not undertake an action based on the consequences, whether good or bad. So, as per the deontologism theory, lying is always wrong and hence you(senior advisor) should not be lying to your client.

-Virtue Theory

This theory believes in being a person of good character and holding a set of virtues which are considered 'ideal'. Here, the focus is on an individual's character rather than the consequences or about the acts themselves. Virtues are inherent characters of a person acquired in his lifetime.  

If this theory is being followed in the case above, you(senior advisor) should take a decision based on the virtues you hold. If you are a person who values honesty and truth above anything else, then you should be honest with your client. If you have a character which values personal gains over anything else, then you should withhold the information from your client until your personal goals have been achieved.

Learning Activity 2

Both the shareholder and stakeholder theories are normative in nature, that is it prescribes a set of norms to be followed for the benefit of both stakeholders and shareholder communities. This issue arises under corporate governance. However, both the theories are at conflict with one another with each theory expecting drastically different things from the organisation.

Shareholder theory asserts that since the shareholders have invested money and other resources into the company, the sole purpose of the company has to be in expanding the profits for its shareholders.

Whereas the stakeholder theory expects the organisation to give back to its society and the ecosystem. Since the society provides various tangible and intangible resources to the organisation, it expects the organisation to give back to the society as well and help the society and people around it to prosper.

As a senior manager in the organisation, I would side with the shareholder side of the debate. Since, the company is in dire need of cutting costs, it needs to take all the steps which will enabe it to reduce the costs and improve their revenues. As far as my parents who are dependent on the social programs offered by the company, I believe there could be other similar programs being offered by other sources as well, into which my parents can enrol.

In situations of reducing sales growths and needs for cost reduction, the company should ensure that it does what needs to be done. Moreover, in certain Asian countries, there is no obligation on the organisations to give back to the society until they are having revenues above a certain mark. Similarly, here Leslie Cosmetics can stop the social programs at the present moment, and once it has regained its lost sales, it can implement new and improved social programs to benefit the society around it.

Source:

Corporate Social Responsibility and Business Ethics: Alexander Brink

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