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The article discusses that the morality aspect is often ignored while doing business now a days. The article negates the traditional view of corporate conscience with respect to shareholders, managers and the society. First of all the writers assess that the shareholders need to maximize the value delivered to them in the form of higher returns. Thus the shareholders’ desires are converted to corporate goals. This results in the organization running after the profit without taking into account the consequences. The other stance is that the managers can use their own set of moral values to set the direction of the organization. This will ignore the interests of almost all the stakeholders except the employees. The shareholder’s view solely focuses on maximizing the profits so that the value for the shareholders is also maximized. Some organizations do the investments that are considered to be socially responsible. Others who favor this aspect shed light on the existence of benefit corporations. The shareholders’ interests cannot be fully protected if seen in isolation to other stakeholders involved. The external forces also play an important part in this regard. The shareholders’ value or conscience will be affected with these external forces. The shareholders see their own benefit only when inverting in an organization. The views that promote the managerial views show that the managers should bring in their own set of moral aspects when analyzing the situation. Those who support this aspect state that the organizations have not taken the morality and business side by side. They say that more religious people should be included in the organizations. The moral managers will allow the business to be run in such a way that will benefit the other stakeholders than the shareholders. The problem with the moral managers is that it brings in the conflict with the shareholders’ value. The last concept shows that the overall social wealth maximization should be pursued. It is however unclear how to achieve the goals associated with the social aspects. An important role of the government has also been identified in this scenario. The managers will not know how to maximize the social wealth.
The article describes three different aspects of corporate ethics, the shareholder view, society view and the managerial view. The normal view is that the business should focus on the maximization of shareholder’s value. This study adds at least two more aspects namely the society and the managers.
The finance field will benefit from this study because the finance managers always pursue a way that will maximize the shareholder’s value. After studying this they will have to rethink their stance. They will have to include the managerial as well as the social considerations in the scenario. The shareholders can better assess the company whether it is fulfilling its duties towards the society and managers as well as trying to maximize the profits earned.
My view before studying the article was that the shareholders have no conscience. This meant that the organization should work only for the maximization of shareholder wealth. After the study I have developed an understanding that the organizations should consider the managers and the society as well. The study has also helped me to know the various benefits and disadvantages of considering these views independently. The organization should develop such plans that take all the aspects side by side. This strategy will benefit the organizations in the long run.
References
BIBLIOGRAPHY Blythe, J. (2014). The philosophy of ethics and the corporate conscience. Social Business , 245-253.
D.Nelson, J. (2018). The Trouble with Corporate Conscience. Vanderbit Law Review , 1655-1702.
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