CHAPTER 2 QUIZ 1 | Which of the following best describes a company that follows the inherence theory of social responsibility? | a. | Managers are responsible to shareholders, but serve them best by being responsible to larger society. | | | b. | Managers answer only to shareholders and act only with shareholders interests in mind.
QBT Task 4 – Final Version 2 Robb Farrell Western Governors University Student ID# 000242903 THE REAL BOTTOM-LINE OF TODAY’S BUSINESS Research reveals that companies that focus on adhering to ethical standards and investing in socially responsible practices to the benefit of all stakeholders have a significant business advantage it today’s market place. Socially and ethically conscious originations have compelling business results in related to employee loyalty, company profits and consumer affinity. There was a time in our capitalist society that an organization’s number one priority and predominant focus was profits and shareholder interest. Indeed things have and are changing. In today’s market climate, companies have had to increase their consciousness as to what really matters.
ALL WK 1, DQ’s: WK 1, DQ 1: What is a business’s obligation to build an ethical culture and balance its desire for profit with ethical responsibilities to employees, customers, society, and the environment? Ethics is different from one person to the next, so it is imperative that business clearly define the norm for staff members and management. The decisions organizations make influence more than business partners, affiliates, culture, and others. It is important for organizations center of attention on maximizing shareholder revenue. Therefore, maximizing profit without causing destruction to the business culture can be a balancing act for most organizations.
Financial Performance Evaluation Introduction Financial Performance evaluation is a very important analysis used for CFO and business managers to identify which aspect of the company are working effectively and which could be improved. The financial performance evaluation is a process that requires the use of different financial ratios to determine results. The most widely financial ratios used when evaluating corporate performance are profitability, asset utilization, liquidity ratios, and capitalization. Profits ratios are the most important and the one of CFO and business manager pay more attention. Profit ratios are used to determine the overall efficiency of the firm in generating returns for its shareholders.
3) The sales budget is to estimate the profitability. As we know, sales budget is used to structure the company in a way to maximize profits. With an accurate projection of future sales, the company is actually can save the expenses and protects the company from failing. If the sales projection is overstated, the president has to decide whether to proceed or to have other alternative planning.
Scholars such as Friedman suggest that treating the economic responsibility as the most important responsibility of a business, is called a profit-maximising view, and “the social responsibility of a business is to increase its profits.” This kind of view states that a company should be operated on a profit-orientated basis, with its sole mission being to increase profits. This approach would seem to benefit stockholders, as well as stakeholders, as the stockholder is going to benefit from the profit made by the company and will gain something back from the company, however problems can occur when the businesses and companies do not balance their ethical responsibility, as they can therefore be perceived as greed and unable to balance their corporate social responsibility, and will cause a bad name for a business. So although the stockholder may also be gaining profit by doing this (what the company sees as doing the right thing) is not necessarily the right thing to do in terms of stakeholders. However, Friedman would argue that as long as the business is maximising its profit, that is the main point and so the loss of the stakeholders is less important. This argument can be deemed as weak as Friedman’s approach does not mean that stakeholders can be benefited alongside stockholders, and so disagrees with
Utilitarianism focuses on: | | | | | Correct Answer: | the consequences of an action. | | | | | Question 3 | | | Equity Capital Corporation provides other firms with funds to expand operations. Questions of what is ethical involve the extent to which Equity has | | | | | | Correct Answer: | an ethical duty beyond those duties mandated by law. | | | | | Question 4 | | Establishing which duties take priority over others determines a firm's views on corporate social responsibility. | | | | Correct Answer: | True.
Companies are in business to produce a profit for their shareholders. To make a profit one must consider all the stakeholders involved that make a business run. Stakeholders are the owners, employers, employees, investors, customers, suppliers, competitors, communities, media and government agencies. Some may think the only responsibility of business is to compete without fraud or deception and in a legal manner using its assets to increase profit. If you consider all the stakeholders, there is a responsibility to do more than make a profit.
What does Carmichael see as the underlying mission of the PCAOB? Mr. Carmichael believes that the main directive of PCAOB is to ultimately restore the confidence of the public and investors in the “independent auditors of public companies” accomplished in accordance with the Sarbanes-Oxley ACT Of 2002. This Act empowers the PCAOB to register public accounting firms, perform inspection audits on these firms, investigating, disciplining and imposing rectifying sanctions and by overseeing the standards that these firms need to meet. The act also allows the PCAOB to perform other activities that will further its mission to protect the investors and look out for the public’s interest. 3.
2. What information would you like to analyze? The economic view of behavior suggests that a review of the incentives for employees. Upper management, the corporate finance employees, have a strong incentive to want accurate reporting for auditing and grant purposes. Review and analyze a strategy to carry that same incentive down ward to the data entry employee, for more accurate data entry.