These resources are then diverted into productive channels. A capital market facilitates and promotes the process of economic growth within my manufacturing business through several ways. The changes in a market will have an effect on the decisions a manager makes. Supply, demand, inventory and production can all be affected by a thriving or poor capital market. The success and effectiveness of a manager will result in investors in the manufacturing company or people who withdraw their investment.
According to Friedman, “A corporate executive is an employee of the owners of the business. He has a direct responsibility to his employers and shareholders. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society” (221). The executives of the corporation have a responsibility to the shareholders because the corporation’s money is the shareholders money. As we read in the Forbes article, the author stated: “How did the corporation’s money somehow become the shareholder’s money?
In this context, what kinds of problems can arise? Solution: In the corporate form of ownership, the shareholders are the owners of the firm. The shareholders elect (vote) the board of directors of the corporation, who in turn appoint the firm’s management (CEO). This separation of ownership from control in the corporate form of organisation is what causes agency problems to exist. Management may act in its own or someone else’s best interests, rather than those of the shareholders.
In order to evaluate the success of those decisions, managers must be able to analyze their decisions and fully understand the impact past decisions will have on the past, present, and future health of the company. The tools to analyze the business in such a manner are found in corporate finance. Thus corporate finance is important to all managers because it provides the necessary tools to evaluate decisions that satisfy every company’s two main goals. Brigham, Ehrhardt. Financial Management: Theory & Practice, 13th Edition.
January 5, 2012 FI515 Homework 1 Mini Case Why is corporate finance important to all managers? Corporate finance is the field of finance dealing with financial decisions that business enterprises make and the tools and analysis used to make these decisions. Corporate finance is important to all managers because it help managers learn the necessary skills select the corporate strategies and individual projects that add value to their company. It`s also tool for managers to know how to find funding for their company and what is the best strategy they need to adopt to do so. b.
There are several main advantages of going public. The first one is that company stock can be used to raise capital. The second one went to the company obtains increased prestige and visibility. And going public can help improve its financial condition by obtaining money that does not have to be repaid. What’s more, company stock in the form of stock options can be offered to employees and contractors as a meaningful form of incentive compensation.
Abstract This paper is discusses the Milton Friedman Theory and how it applies corporations and the government. It will also discuss the responsibilities of firms and the government and whether or not they play a role in the expansion the Friedman Discussion. Milton Friedman Goal of the Firm Milton Friedman is a noble prize winning economist whose philosophy on corporate social responsibility (CSR) has shaped the business world today. Friedman believed that businesses only social responsibility is to utilize resources and engage in activities that would maximize profits without the use of deception or fraud while conforming to the basic rules of society (Friedman, 1970) . Executives are hired to act as fiduciary agents of their stockholders for the purpose of increasing wealth (Smith, 2003).
FI515_Homework1 Mini Case (p. 45) a. Why is corporate finance important to all managers? Successful companies must be able to generate enough cash to compensate the investors who provided the necessary capital. In order to do this managers must be able to evaluate any proposal, whether it relates to marketing, production, strategy, or any other area, and implement only the projects that add value for your investors. For this, you must have expertise in finance.
Mini Case Why is corporate finance important to all managers? Corporate fiancé is the basic component of how business is run. It is necessary to direct funds or products in a company. Corporate finance also helps managers to forecast the funding requirements of their company and the necessary strategies to acquire those funds. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation.
Leadership: Trustworthiness and Ethical Stewardship Anthony Owusu Ansah Northcentral University Abstract This paper discusses the correlation between the elements of leadership, trustworthiness and ethical stewardship. In this paper, evidence is presented to support a positive correlation between an organizational leader’s perceived behavior, ethical stewardship, and trustworthiness on his/her employees and the rest of the individuals in the organization. KEY WORDS: leadership, trustworthiness, ethical stewardship Introduction The problem to be investigated is the relationship that exists between leadership, trustworthiness and ethical stewardship in corporate organizations. In the global marketplace, the importance of understanding the relationships between leadership, leader’s trustworthiness, and the ethical duties implicit in the psychological contract have become increasingly important (Caldwell, Hayes and Long, 2010). Scholars and practitioners have increasingly acknowledged the gap of trust between leaders and followers, which undermine employees’ commitment, impair wealth creation, and create increased transaction costs in organizations throughout the world (Caldwell et al., 2010).