Case Study : ' Original Altruistic Spirit ' Destroyed After Kraft Company

In the corporate setting, capitalism plays an important role in the sense that it helps ensure that the decisions made by leaders, such as the CEOs, take into consideration the company’s or stockholders’ interest in gaining profit (Peñaloza & Barnhart, 2011). This implies that it compels business leaders to make decisions that minimize loses while increasing the profitability of the firm. In most occasions, this is accomplished through the application of the utilitarian and Kantian approach to decision-making. However, it’s important to note that the central implication of public capitalism is that of helping foster corporate decision-making based on the broader effort to promote the public good (Peñaloza & Barnhart, 2011).

The faith in corporate America has been somewhat fragile with the knowledge of many corporate wrongdoings like the Enron scandal, recent financial buyout, and the ethical issues with bonuses for executives. Dipankar (2008) has a theory that

What is ethically responsible management? How can a corporation, given its economic mission, be managed with appropriate attention to ethical concerns? These are central questions in the field of business ethics. There are two approaches to answering such questions. The first one is Milton Friedman’s shareholder theory of management and the second one is Edwards Freeman’s “Stakeholder” theory of management, two different views about the purpose and aims of a business.

Over the years, firms have increasingly been maximising shareholder value. However, Steve Denning, a former director of the World Bank, author of six leadership and management books and columnist for Forbes, disagrees. His article “The Origin of the ‘World’s Dumbest Idea’: Milton Friedman”, was published on June 26, 2013 on Forbes, debates against Friedman’s argument that the social responsibility of corporations is to make money for its shareholders. The main issue here is whether the maximisation of shareholder value as the guiding principle of executives is detrimental to the corporation. Although Denning has exhibited valid points in his argument, his lack of citation, biased view on most arguments and his tone has dampened the credibility

According to Ho (2009), “The takeover movement culturally commoditized and transformed the very definition and purpose of a public corporation; the corporation became its quickly exchangeable stock in the financial markets, and its primary mission was to increase its stock price.” (p. 129-130). Corporation is much more than an exchangeable stock as it employees billions of people around the world, has a significant input into the world’s economy and produces the goods consumed by billions of people around the world. As it was argued by Michael J. Sandel in in the article of “How Markets Crowd out Morals”, some goods cannot be commoditized without losing its intrinsic value. In this case, corporations became commoditized at the cost of society's

The problem to be investigated is the conflict that can arise within companies between doing what is right (or moral) and doing what is often viewed as more important the attainment of corporate goals. This conflict is highlighted in the case study involving Fannie Mae (FM). (Jennings, 2009) In this case, 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 for the executives actions and learn from their mistakes and misjudgments the following topics are reviewed: 1) ethics and social responsibility, 2) the importance of devolution, 3) the power and value of incentive plans, 4)

The corporate world has an unfavorable view of itself by being selfish, evil, and against the average American. Companies market themselves and their products in certain ways that makes them and their products appealing to everyone and if not everyone then a certain group of people. Every company has a mission to follow and values to go by, but some companies lack ethics and morals. In this paper I am going to talk about one company that engages in ethical behavior and another that doesn’t.

Categorized by the natures, shareholders are recognized as the banks, trusts, insurance companies, private equity fund, public pension funds, religious groups, worker unions or a unique individual who is a natural person. They can be divided into the majority or minority shareholders, institutional or individual shareholder based on the group sizes and functions. The majority or institutional shareholders are continually believed to play an unprecedented role in corporate governance. King (2009) believes one of the major reasons for market failures connecting with governance is due to the absence of institutional shareholders. From the view of the sponsor’s motivations, the shareholders are financial activists who focus on the firm’s performance and social activists who pay more attention to corporate social responsibilities. Within the limit of this research, we differentiate the sponsors population into two distinct groups: the gadfly group that represent for all hyperactive individual shareholders and the other shareholder groups which include all other remain shareholder

This essay will aim to investigate the ethical treatment of shareholders and workers in a traditional, capitalist corporation; The Ford Motor Company and compare and contrast the findings with the treatment of these stakeholders in the Mondragon Cooperative Corporation. The structure of this essay will be as follows; firstly the fundamental differences between the two contrasting organisations will be examined and how these differences impact the ethical treatment of the relevant stakeholders; secondly, the ethical treatment of shareholders in regards to corporate governance and the executive’s accountability and control will be investigated, and lastly, the ethical treatment of workers within the two contrasting organisations will be

Self-interests is the central element of capitalism that ultimately has led to the principle-agent problem in various fields such as public corporation. The central element of capitalism, as part of the American society, is for individuals to serve in their best interests. Therefore, the capitalist’s culture has ultimately led to the principle-agent problem: when the agent, whose power was delegated by a principle, has motives other than acting in the best interests of the principle. In a public corporation, where the ownership is shared by numerous stockholders, the principle, they have to find an agent, such as managers, to operate the business. This problem can be demonstrated when executives, the agent, are trying to fulfill the corporate

Many companies are faced with making ethical business decisions on a daily basis. In this essay Nortel a Canadian telecommunications company is examined to understand how a company can become so successful and then plummet to rock bottom over the time span of a few short years. These factors are examined by first understanding the factors that contributed to both the rise and fall of Nortel form an ethical perspective. Following the examination of the rise and fall of Nortel several questions will discussed in detail to include: What mechanism should have been put into place to better align managers and shareholders interest? Was Nortel’s failure based on the failure of individuals or capital market process? Why do businesspeople like Nortel

This paper will have a detailed discussion on the shareholder theory of Milton Friedman and the stakeholder theory of Edward Freeman. Friedman argued that “neo-classical economic theory suggests that the purpose of the organisations is to make profits in their accountability to themselves and their shareholders and that only by doing so can business contribute to wealth for itself and society at large”. On the other hand, the theory of stakeholder suggests that the managers of an organisation do not only have the duty towards the firm’s shareholders; rather towards the individuals and constituencies who contribute to the company’s wealth, capacity and activities. These individuals or constituencies can be the shareholders, employees,

The idea that morally dubious goals may be legitimate inside capitalism will be discussed in light of a tax avoidance case study. Apple, a multinational technology company, has avoided paying its fair amount of income tax for years. This paper will consider the structural embeddedness of Apple’s legitimised goal—the maximisation of profit—through the ‘Double Irish Dutch sandwich’ tax haven model. Durkheim’s theory of collective conscience was used in explaining the legitimisation of the company’s profits-driven goal, and how its amorality becomes apparent outside the economical sphere. This paper will also discuss the interconnected nature of the harm and benefits in the deal made between Ireland and Apple. The association between legitimations of Apple’s conduct and its socially challenging behaviour has been analysed to be ambiguous in the letter of the law. The conclusion will shed light on the morally grey area of a company’s responsibility to its shareholders versus the needs of the community.

There are several problems that can we seen in business ethics. “Discussions of the role of the corporation in society and the very purpose of a corporation as a social institution are examples. It is not disputed that the purpose of a for-profit corporation is to make a profit for stockholder, but there has been an intense debate about whether maximizing stockholder profits is the sole legitimate purpose of corporations” as Milton Friedman and other have argued and whether beneficent corporate conduct is justifiable. This question is normative, but there is also the question of moral psychology raised by Smith: “Does beneficence have any place in the world of business?” An example is found in public utilities’ program to help customers pay for electricity, gas, oil, phone service, and the like. This attitude not only won’t increase the company profits but reduce. In fact, this is a corporate form of charity. The money is taken directly

Corporations the world over have been publicly criticized for improving their firm’s bottom line at any moral or social cost. Ethics essentially “refers to the issues of right, wrong, fairness and justice.” Clearly, examples such as Enron, WorldCom, and even Conrad Black tested society’s views on sound ethical business and the link to what society sees as “good” governance practices. Although the controversies involve issues matched in variety only by the types of companies, they all virtually involve some form of abuse of stakeholders trust. These cases are not representative of the entire spectrum of today’s business environment; in fact, there are a number of companies whose competitive advantages are based on