Question

1. Under what conditions should ethical considerations be part of a company’s business plan? Should a company periodically measure its ethical performance? If so, what are the best ways for a firm to do this?

2. If you launched a start-up venture before graduating with your degree, why would you or why would you not offer stock options to your employees?

Answer 1

1. Ethics is now a growing concepts. Every organisation is following this and there are several rules also for ethical guidance. The govenment expects every organisation to follow this. It is very necessary to include enthical consideration in the business plan. A company gets open for longer period of time. It is for going concern as per accounting concept. So, it should not involve any such objectives which will hamper its functioning as several agencies closely watches the activities of every organisation. So, in order to sustain for longer periods the compnay needs to include ethical consideration in its business plan.

The company should also measure its ethical performance from time to time. As the law gets changed so it may be possible existing business comes in grey area. So, an ethical audit should be made periodcally. The firm needs to check on regular existing rules in the industry they are working and necessary adjustmnets can be made.

2. Stock option is one of the benefits given to existing employees. The employees works for longer period and in order to recogise the contribution they are offerred stock options.

The option may be given as the degree has not been completed and there is need of specialized person to handle the activities of the firm. Giving option will retain the valued employees and growth can be expected.

The option may not be given as the firm is quite new. It has to focus on its operations rather than incentives as new firm will require lot os attention otherwise it will hamper its activities. Also, stock option requires lots of regulation which can be hard for a newly formed firm.