As a business whose main aim is to make profit and in that case maximise its profit, we ought to think of way through which we can achieve this main objective of our business. Every stakeholder has a right to receive the greatest return from his investment in any business. I understand that it is the responsibility of every business to take part in the developing the society in which it is situated around but this does not mean sharing the benefits of the business largely with the society. This is a business and one way of maximising profit is by reducing expenses and one way is by getting rid of unnecessary costs.
Whatever we engage ourselves in as business should as well bring some returns into the business. This call for care in the decision making process. There are a couple of things we have to consider before jumping into a conclusion. First of all we have to identify the relevant facts about the issue at hand. We should have questions in mind such as; is the action going to be of any benefit to our company? Is what we are engaging ourselves in in accordance with the law and is it what is expected of or company? Secondly we have to identify the relevant issue. What are we trying to solve and how is it of concern to our business. Thirdly we have to identify the primary stakeholders, the people who have the greatest impact on the existence of the company. What effect will our decision have to this stakeholders?
In my view I would advise us not channel of money where it is not necessary as far as the success of the company is concerned. Financing another social program is still ethical but we should remember that what keeps the business running is how efficient it makes use of its resource. What we have already done is enough considering the responsibility we have as a company to the society. This money should be used in expanding the company and improving its performance as well. We should not forget the number of individuals whom daily bread comes from this company. Improving the performance of the company is a quality assurance of its continuity in existence and as a result assured source of income to the different stakeholders most of whom give back to the same society.
Ethics are rules of conduct or guidelines for moral or socially accepted code of conduct. Ethical conduct apply to behaviour of conduct that can have substantial effect on peoples’ lives.
In this scenario, the chief financial officer (C.F.O) has an obligation to do what is right. However he is supposed to obey his boss, in this case the chief executive officer (C.E.O). On the other hand the shareholders have a right to sell the company since it’s their property. They also have a right to know the real value of the company as well as getting the right information about the business. It is ethical for the company to maximise its profit for the shareholders to get a greater return to their investments,
However, on the contrary, it’s unethical for the chief executive officer to give false information about the worth of the company. It’s also unethical for the C.F.O to receive more pay for unethical dealings. Looking at it from a different perspective, the company has many employees who might end up losing their jobs is the business is sold. Anything good which could be done favouring the many employees so as not to lose their job will be of great help as well .
As a chief financial officer, my work is to give the financial status of the business. The company is degrading in its performance and the reasons could be because of poor management. Siding with the chief executive officer will assure me an increase in my salary but what consequences will this have in future to me and to other stakeholders?
In case the company is sold to the new buyer the management will have to change and I will be under a new boss if at all I won’t lose my job due to change of ownership. Eventually the new management will discover the real value of the business and this might lead a court case and since I was under the responsibility of giving the financial report of the company I will be in big trouble trying to justify my mistakes. I might actually end up losing my job and may be being prosecuted. But again what will be the fate of all the employees in the company? This will depend on the new management. One thing though is that a few employees might lose their job but there is an assurance that most will remain in the company since it will have to continue with its operations.
In conclusion, siding with chief executive officer of the company in order for me end up having a better pay will just worsen the whole situation in the long run. It’s again unethical to receive a bribe. According to justice theory of ethics, any harm to individual in the process of decision making should be justifiable. In this case making a deal with the C.E.O just for both of us to benefit financially in the expense of the other shareholders is not justifiable. There should be a fair distribution of benefits as well as burdens. Therefore it will be unethical to lie about the worth of the company, receiving a bribe and also denying the shareholders their right to getting the correct information about their investments. For this case I would not chose to side with the chief executive office but rather do what is right and ethical. I would chose to write down the stock in the end year account.