Question

Using the Property Theory and the Contract Theory of entity governance, compare and contrast the ethics challenges facing a closely-held business (one with one or only a few shareholders or owners), on one hand, and a publicly-traded corporation consisting of a variety of shareholders, on the other hand, including a description of the primary causes and effects of such challenges.

Answer 1

Property Theory- Property Theory is theory that deals with property ,it formulates law related to the property.

Contract Theory- Contract theory is a study on how individuals and businesses contruct and develop legal or lawfull agreements.It explains and analyzes how to parties build formal and informal contracts with conflict of interest.

Ethical Challenges- Business ethics is a form of ethic which examines the moral princilples and problems in a business envoirment. Below are few ethics challenge faced by businesess with few share holders and Owners -

1 - Discrimination and Harassment - This is one of the biggest ethical issue faced by the few shareholders organization . Discrimination on work place effects hugely of employees performance.

2- Compliance - Employees not following the standards and lack of control by the management.

3- Health and Safety Arrangements - Lack of arrangements for health and safety issues faced by the employees

Below are few challenges faced by  publicly-traded corporation consisting of a variety of shareholders-

1- Corporate Social responsibility- Publicly traded companies shoud adhere to corporate social responsibity and any non- compliance will lead to legal proceedings against them.

2-Ethics and Culture - Corporate Governance ethics and culture should be followed by all level of employees , this can be acheived by establishing traning structures regularly , involves huge cost.