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    American Airlines

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    Write a paper in which you:
    1. Discuss how senior management's short-term focus on stock price in a publicly traded company can lead to unethical behavior.
    2. American Airlines has historically manipulated its earning by deferring aircraft maintenance. Discuss how this behavior may be unethical to both its shareholders and customers.
    3. Analyze the factors that contributed to American Airlines' decision to file for bankruptcy in 2011 and provide evidence regarding whether it was ethical for management to do so.
    4. Evaluate the impact of the bankruptcy on American Airlines' current employees and retirees. Discuss the ethical implications for a corporation to reduce or abandon its retirement benefit obligations. Support your answer.
    5. Use three (3) external sources as part of your assignment

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    1. Discuss how senior management's short-term focus on stock price in a publically traded company can lead to unethical behavior.
    Management's short term focus on stock price in publicly traded company can lead to unethical behavior. The purpose of the senior management is to show that the quarterly targets for revenues and earnings have been achieved. If the required growth in revenues and profits are earned the stock price does not plummet and in most cases the senior management gets its bonus and commission.
    Such targets can lead to unethical behavior. The management tries to "plan" out its earnings and income. When the revenues are high, part of the revenues and profits are held back in the form of reserves, so that future earnings can be increased. Such behavior is unethical because from the deontological ethical perspective, the company is duty bound to disclose its correct revenues and income.
    On the other hand when the revenues are relatively low there are several unethical means used to increase the revenues and profits. One method is channel stuffing. Unordered goods and overpriced goods are sent to the distributors or dealers at the end of the quarter. The purpose is to illegitimately inflate the revenues of the company. Similarly, goods sent on consignment or sent on approval basis are shown as sales and revenues are inflated. Each of these activities is unethical. From the consequential ethics perspective the inflation of sales can adversely affect the sales of the next quarter. This unethical procedure has to be repeated the next quarter till the bubble bursts. The obsession with achieving quarterly profit targets leads to more unethical behavior. Expenses are shown as assets! The effect is that the profits are inflated. These behaviors mislead the stakeholders including the shareholders, employees, and investors(Brink Alexander, 2011).

    The senior management's short-term focus on stock price can lead to a variety of unethical behavior. The focus is to achieve the targets set for the quarter through fair means or foul. The unethical behavior can be reduced if the stock ...

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    This answer provides you an excellent discussion on American Airlines