Explain whether you agree with this statement: Executives in large corporations are ultimately rewarded if their companies do well, particularly as evidenced by rising stock prices.
As we discussed in class on Tuesday night, your paper assignment will be based on the material in Chapter 5- Ethics and Business Decision Making. First, the technical details. The paper is due in class on November 17. You must turn a hard copy in to me. Do not email the paper or turn it into me only in electronic format. The paper must be at least 5 pages, and not more than 10, double-spaced in 12 point, normal font (i.e. Times New Roman, Courier). This is not a writing class but please use proper grammar (complete sentences, punctuation, etc.) and spell check. A poorly written paper will impact your grade. The paper is worth a maximum of 250 points. You will lose 10 points for each day the paper is late.
In class we spoke about two ways to approach ethical business decisions. The first is to simply look at a decision from a bottom line point of view. Will this decision maximize profits (both short term and long term)? Those that support this position hold that the purpose of a business is to make money and the market will decide whether or not the company is making the right decisions (i.e. if the company is making poor decisions people will stop buying products or services from it). This school of thought holds that corporate executives only concern when making a business decision is what maximizes shareholder profit.
The counter argument to this view is one of corporate social responsibility. In this view, corporate executives should not only take in to account the bottom line, profits and losses, but also consider the impact the decision will have on various stakeholders, including employees, customers, and the communities where the are located. Those that hold this position believe that because corporations control so much of the wealth and power they have a responsibility to may decisions in a socially beneficial way.
With these two theories in mind, explain whether you agree with this statement: Executives in large corporations are ultimately rewarded if their companies do well, particularly as evidenced by rising stock prices. Consequently, when corporate executives are deciding what level of negative side effects their goods or services may cause is acceptable, should their only concern be what the market will tolerate?
If your answer is that you do agree with this statement then you will be arguing for a purely bottom line, profit and loss, view point. If you do not agree with this statement then you will be arguing from a corporate social responsibility stand point.
There is no right answer and your grade will not be impacted by whether you agree or disagree with the statement. I want to know what you think. Your grade will depend on how well you support you answer by using the material in Chapter 5 of the book but in also using your own reasoning and logic. I want to hear what you have to say on this issue so is not a research paper. You can certainly use examples that may be in the news, etc. in your paper but do not spend hours researching.