The Golden Parachute

Even if the company is not taken over, the fear of takeover may prevent its co-operate board and managers from straying too far from profit maximising.

out of the stock to make other profitable investment, and they can also maintain their

2. When an acquisition takes place, there is usually a lot of concern on behalf of all the company’s employees.  Not only the company that is being acquired also by the company that is doing the acquisition.  Usually there will be jobs lost, consolidation of positions, promotions, demotions, etc. It is the responsibility of the Human Resources Department to ensure

* The new investor should leave sufficient liberty for the management to pursue their own strategy

Managers and shareholders are the utmost contributors of these conflicts, hence affecting the entire structural organization of a company, its managerial system and eventually to the company's societal responsibility. A corporation is well organized with stipulated division of responsibilities among the arms of the organizational structure, shareholders, directors, managers and corporate officers. However, conflicts between managers in most firms and shareholders have brought about agency problems. Shares and their trade have seen many companies rise to big investments. Shareholders keep the companies running

By using the principle of utility I would manipulate the financial statement by overstating the overall profit; as a result, all employees can keep their job. As principle of utility means choosing the alternatives that creates the most happiness for all the people being affected.

This situation can lead to negative consequences for a business when its executives or management direct the organization to act in the best interest of themselves instead of the best interest of its owners or shareholders. Stockholders of the enterprise can keep this problem from arises by attempting to align the interest of management with that of themselves. This normally occurs through incentive pay, stock compensation, or other similar incentive packages that now cause the managers financial success to be tied to that of the company (Garcia, Rodriguez-Sanchez, & Fdez-Valdivia, 2015; Cui, Zhao, & Tang, 2007; Bruhl, 2003; Carols & Nicholas,

In large corporations the success or failure of the company is the responsibility of the board of directors. According to Richard DeGeorge, “The members of the board are responsible to the shareholders for the selection of honest, effective managers, and especially for the selection for the CEO and of the president of the corporation.” (p. 202). The board members have a moral responsibility to ensure the corporation is run honestly, in respect to its major policies, and to ensure the interests of the shareholders are satisfied. The next responsibility within a corporation is the responsibility management has to its board of directors. DeGeorge writes, “It must inform the board of its actions, the decisions it makes or the decisions to be made, the financial condition of the firm, its successes and failures, and the like.” (p. 202). The management of the corporation is morally obligated to

Hostile takeovers are no longer common as they were in the 1980s. However, legal and ethical issues still surround mergers and takeovers (Thomas, 2009). This document examines and identifies legal and ethical issues which the merging parties should consider before, during and after a merger. The document will also look at measures of managing these legal and ethical issues.

can be done to ensure that the company will work in the best interest of the

a) Profit Sharing: return of some company’s profit to employees in the form of cash bonus or retirement supplement.

To maximize shareholder value through a systematic, disciplined, reliable, ethical, and ongoing process of supply of goods or services.

It was reasonable for a CEO’s compensation to increase as the company expanded and became a larger entity, and the newly-granted shares and increasing stock options further aligned the CEO’s personal interests with those of the company and shareholders. In this sense, the second compensation package was also well-structured and not excessive. Seeing Sunbeam’s revenue rising and stock price climbing steeply upwards, Sunbeam’s shareholders and directors were fully convinced by Dunlap’s leadership, so they might perceive the increase in compensation amount necessary to retain and better motivate Dunlap to enhance the company’s value. Nonetheless, they neglected the fact that the increased portion of the equity-based compensation also further motivated the CEO’s dangerous behaviors pertaining to improper earnings management.

When a principality is acquired through an acquisition of a non-hostile nature, it is the prince who may have fears. The prince of a “mixed principality” faces more difficulties than those of a hereditary principality. Machiavelli suggests that these “difficulties derive from one natural problem inherent in all new principalities: men gladly change their masters, thinking to better themselves” (8). Additionally, the new prince is, out of necessity, going to offend his new subjects by bringing in “his soldiers and [causing] other countless injuries that are involved in his new conquest” (8). These same problems will face the management of a newly acquired business. Those employees that are retained will automatically look to better their current position by less than honest means. Those “left over” from the old regime may be inclined to steal from the company out of fear that they may soon be replaced. Thus, endangering the already financially unstable situation that an acquisition puts a company in. Therefore, measures must be taken to ensure that the state/company not be lost due to an uprising by the

When one asks himself/herself these questions, one’s inner conscience becomes active and then end up asking oneself the ultimate question: “Is it right or wrong”? If only management made all their business decisions by firstly considering other factors that would be affected by the decision issues such as bribery and fraud.