What ethical implications arise as a result of an organization employing various working capital strategies to realize long-term opportunities.© BrainMass Inc. brainmass.com October 24, 2018, 9:51 pm ad1c9bdddf
It's an interesting question and I've seen it a couple of times in the last few days. I doubt if there is a textbook answer but in thinking about it, I may have some ideas of situations where working capital strategies and ethical behavior might collide for negative effects.
A favorable working capital ratio is important inside the company for liquidity to pursue opportunities, and also important to stakeholders outside the company (including bankers and shareholders). Working capital results from profits and good management of current assets and liabilities. Yes, we know that, but what are the ways in which working ...
The solution briefly explains why a good working capital ratio is important in order to to pursue opportunities, but then it goes on to list 14 possible situations where actions taken would improve working capital on paper, but might not be ethical transactions. The 14 conditions are not overt fraud, but more like manipulation to achieve desired results.
Ethics & Strategy
I need help with the following study questions:
1. A belief in ethical relativism leads to the conclusion that
A. it is up to each company to define and implement its own ethical principles of right and wrong.
B. there is no objective way to prove that some countries or cultures are correct about what is proper business ethics and others are wrong.
C. concepts of right and wrong are always relative to an individual's own values and beliefs.
D. each industry should have the flexibility to set its own standards for judging the ethical quality of business actions/behaviors in that industry.
E. concepts of right and wrong are always relative to the religious principles prevailing in a given society, culture, country, or market situation.
2. Which of the following statements is false as concerns the various approaches company managers can take in dealing with or managing ethical conduct?
A. Companies that adopt a compliance mode usually do such things as making the company's code of ethics a visible and regular part of communications with employees, having ethics training programs, appointing a chief ethics officer or ethics ombudsperson charged with giving guidance on ethics matters and/or instituting formal procedures for investigating alleged ethics violations, conducting ethics audits to measure and document compliance, and giving ethics awards to employees for outstanding efforts to create an ethical climate and improve ethical performance.
B. Companies using the damage control approach usually make some concession to window-dressing ethics, going so far as to adopt a code of ethics (so their executives can point to it as evidence of their ethical commitment should any ethical lapses on the company's part be exposed).
C. One of the weaknesses of the compliance approach is that moral control resides in the company's code of ethics and in the ethics compliance system rather than in an individual's own moral responsibility for ethical behavior.
D. The main objective of the compliance approach is to protect against adverse publicity brought on by angry or vocal stakeholders, outside investigation, threats of litigation, or punitive government action; hence, the need to make token gestures toward rejecting unethical behavior (such as adopting a code of ethics) and instituting largely un-enforced compliance procedures that can be pointed to in the event of ethical lapses that come into the public spotlight.
E. Companies using the unconcerned or non-issue approach ascribe to the view that business ethics is an oxymoron in a dog-eat-dog, survival-of-the-fittest world and that under-the-table dealing can be good business.
3. Which of the following represents a justifiable reason for why a company's strategy should be ethical?
A. An unethical strategy reflects badly on the character of the company personnel involved.
B. A strategy that is unethical in whole or in part is morally wrong.
C. An unethical strategy can put a company's reputation at risk and do lasting damage.
D. An ethical strategy is good business and is in the best interest of shareholders.
E. All of these.
4. Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition
A. are generally successful in preventing the payments of bribes and kickbacks even if such payments are normal and ustomary in certain locations where they do business.
B. are misguided in their efforts because bribes and kickbacks are really no different from tipping for service at restaurants-whether you tip for service at dinner or make payments to government officials to get goods through customs or give kickbacks to customers to retain their business, you pay for a service rendered.
C. still have considerable difficulty in preventing the payments of bribes and kickbacks when such payments are entrenched as normal and customary in locations where they do business.
D. have considerable difficulty in preventing the payments of bribes and kickbacks in those countries where such payments are perfectly legal-namely China, Argentina, Mexico, Italy, Japan, and Finland.
E. are in a distinct minority compared to companies that view the payment of bribes and kickbacks as a legitimate or permissible practice.
5. Business ethics involves
A. operating companies in a socially responsible manner.
B. Making socially responsible business decisions.
C. the application of general ethical principles and standards to business behavior.
D. balancing the interests of shareholders against the interest of other stakeholders.
E. picking and choosing among the consensus ethical standards of society to arrive at a set of ethical standards that apply directly to operating a business.
6. Which of the following is generally not an oft-expressed concern regarding the extent to which "do-good" executives should pursue their personal vision of a better world using company funds?
A. Any money executives authorize for so-called social responsibility initiatives effectively reduces profits for shareholders who can, after all, decide for themselves what and how much to give to charity and other causes they deem worthy.
B. Companies should be wary of taking on an assortment of societal obligations because it diverts valuable resources and weakens a company's competitiveness.
C. Spending shareholders' or customers' money for "worthy social causes" not only muddies decision making by diluting the focus on the company's business mission but also thrusts business executives into the role of social engineers-a role more appropriately performed by charitable and non-profit organizations and duly-elected government officials.
D. Corporate executives are not always competent or in the best position to decide how to best balance the different interests of stakeholders or to function as social engineers.
E. Company spending for socially responsible initiatives is so "out-of-control" that shareholders have a legitimate complaint that competitiveness is being eroded.
7. Which of the following is not generally on a company's menu of actions to consider in crafting a strategy of social responsibility?
A. Actions to ensure that the company's strategy is ethical and that ethical principles will be observed in operating the business
B. Making charitable contributions, donating money and the time of company personnel to community service endeavors, supporting various worthy organizational causes, and reaching out to make a difference in the lives of the disadvantaged
C. Actions to look out exclusively for the interests of shareholders
D. Actions to protect or enhance the environment (apart from what is required by governmental authorities)
E. Actions to create a work environment that enhances the quality of life for employees and makes the company a great place to work
8. In companies with window-dressing ethics and core values or in companies headed by immoral or amoral managers, any strategy-ethics-values linkage stems mainly from
A. directives from the company's board of directors to "clean up their act."
B. rewriting the company code of ethics and values statement in loose enough and vague language to permit the use of shady strategies.
C. "spinning" the company's strategy to the public and to company personnel in such a way as to make it appear that ethical standards and core values are being fully observed.
D. a desire to avoid the risk of embarrassment, scandal, and possible disciplinary action should strategy-makers get called on the carpet and held accountable for approving an unethical strategic initiative.
E. coincidence and the good fortune of having some aspects of the company's strategy turn out to be compatible with stated values and ethical standards.
9. Which of the following are traits of the capability-building process?
A. Evolving changes in customer needs and competitive conditions often require tweaking and adjusting a company's portfolio of competences and intellectual capital to keep its capabilities freshly honed and on the cutting edge.
B. Normally core competences and competitive capabilities emerge incrementally as a company (1) acts to respond to customer problems, new technological or market opportunities, and the competitive maneuvers of rivals or else (2) tries to capitalize on the skills, abilities, and know-how that contributed to its earlier successes.
C. Core competences or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.
D. The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on deepening and strengthening the competence or capability so as to achieve the dominance needed for competitive advantage.
E. All of these.
10. In organizing a company's work effort and matching the organizational structure to the needs of the strategy, it is fair to say
A. there is no perfect or ideal organizational structure.
B. organizational capabilities emerge from a process of consciously knitting together the efforts of different work groups, departments, and external allies, not from how the boxes on a company's organizational chart are arranged.
C. strategy implementers should pick a basic design and then modify and supplement it as needed to fit the company's particular circumstances.
D. the specific ways and means of how a company should go about developing strong core competences and organizational capabilities have to fit the company's own particular circumstances.
E. All of these.
11. The overriding consideration in assembling a capable top management team is to
A. select people who are knowledgeable about industry and competitive conditions so as to keep the organization market-driven and customer-driven.
B. put together a group of managers who not only possess the full set of skills to get things done but also have the personal chemistry to work well together.
C. choose managers experienced in building the very kinds of core competences the company needs for good strategy execution.
D. select people who have similar management styles, leadership approaches, business philosophies, and personalities.
E. choose managers who believe in decentralization and empowerment of employees.
12. Which of the following is generally not among the practices that companies use to develop their knowledge base and build intellectual capital?
A, Careful screening and evaluation of job applicants
B. Expecting employees to take full responsibility for staying up to date, thereby minimizing the need to train or retrain employees
C. Coaching average performers to improve their skills and capabilities, while weeding out underperformers and enchwarmers
D. Encouraging employees to be creative and innovative along with giving people skills-stretching assignments and rotating them through jobs that span functional and geographic boundaries
E. Fostering a stimulating and engaging work environment such that employees will consider the company a great place to work
13. Employee training and retraining is an important vehicle for strategy implementation when
A. a company shifts to a strategy requiring different skills, competitive capabilities, managerial approaches, and operating methods.
B. the organization is trying to build skills-based competences.
C. technical know-how is changing so rapidly that a company loses its ability to compete unless its skilled people are kept updated and have cutting edge knowledge and expertise.
D. All of the above.
E. Just A and C.
14. Which one of the following is not part of structuring the work effort in ways that promote successful strategy execution?
A. Providing for cross-unit coordination and the necessary collaboration with suppliers and strategic allies
B. Deciding which, if any, value chain activities to outsource
C. Determining how much authority to centralize at the top and how much to delegate to down-the-line managers and employees
D. Selecting the right people for key positions and determining how to capture resource fit benefits
E. Providing for cross-unit cooperation and collaboration to build/strengthen strategy-supportive competences and capabilities
15. Outsourcing non-critical value chain activities offers such advantages as
A. helping concentrate company resources and energies on those value-chain activities where the company can create unique value for customers and/or develop dominating depth in one or more competences and capabilities.
B. helping decrease the size and influence of internal bureaucracies.
C. promoting a total quality management culture.
D. eliminating the need to employ complex organizational structures.
E. Both A and B are correct.