Question

A senior financial manager is reviewing her company's financial performance for the previous year at the annual stockholders' meeting. The news is bad. Sales dropped 30% and profits were down 50%. One of the stockholders stands up and asks the manager, "what caused this drastic decline, and has it been corrected?"The manager knows that the primary reason for the declining sales and profits was a series of poor top management decisions made over the past several years, but she also knows that's not what her management colleagues want her to say Further, she personally believes that the decline is not over, but she recognizes that's not what the stockholders want to hear

a) define ethics
b)should this manager lie, explain your reasoning.
c)is lying always wrong, or is it acceptable under certain circumstances? what if any, should those circumstances be?
d) what do you think ? what would you do if u were this manager and why
e)briefly discuss what management can do to improve business ethics.

Answer 1

a) Ethics: Ethics are set of rules the organization or company should follow as a part of their role and responsibilities.

b) I think here manager should lie because for company's interests and to protect the stakeholders. If he tells that due to higher management decisions, this happened, it would lead to loss of interest for prospective stakeholders and the companies stakes will come down leading to more losses for the company. As a manager, it is his duty to protect stakeholders interests and also subordinates lives

c) Lying is acceptable under certain circumstances if lying protects the company's interests and stakeholders interests. If your lie protects your company's interests and improve your company prospects of making into profits in near future, it is acceptable.

d) I think first of all the company's interests are important as you need to protect both your employees and higher end management including your stock holders, debtors. If I am manager of this company, i would lie and say that the decline is because of some internal reshuffling and temporary. The company would come into profits in near future and the decline is temporary.

e) Management should follow some rules to improve business ethics:

• Fair decisions should be implemented
• Transparency should be maintained while maintaining business ethics
• While taking some important decisions, meetings should happen and go with voting mechanism
• Each and every individual employee decision should be taken into consideration before taking major decisions