Contrasting The Needs Of Shareholders Essay

Length: 2 pages Subject: Sports - College Type: Essay Paper: #46435921 Related Topics: Red Cross, Sport Finance, Charity, Employee Morale
Excerpt from Essay :

¶ … Stockholders

The decision that the champion of AHF is faced with in this particular case study is a business decision. One may argue that most business decisions involve ethics, particularly those that directly affect the livelihood of its employees. However, USHF is not a charity organization. It is a business organization that is attempting to make a profit. In that regard, the decision of whether or not to discontinue AHF immediately or to allow it to continue with serious reductions to its workforce for the next couple of months is purely based on business concerns and outcomes.

Although AHF has produced some value, it is not engendering profits at a rate swift enough to satisfy its stockholders. Moreover, it is negatively impacting the profits of its parent company, USHF. USHF initially conceived of AHF and located it in Sri Lanka because it believed that doing so would help it further its own goals. If the opposite effect is being produced -- that AHF's operations are actually draining USHF's profits, which they are -- then the decision to shut this operation and...

...

As such, this decision is primary about business, and scarcely involves ethics.

The goal of shareholder wealth certainly factors into the decision of whether to shut down AHF immediately or to allow it to continue for another six months. From a purely business perspective, the company (UHSF) is actually owned by the stockholders. They have the individual shares in the company that collectively grants them ownership. As such, the impact of the business decision on them and their stocks is of primary importance in this particular case. All parties involved in this decision must be aware of that fact that in actually, they are working for those individuals who own stock in this company.

If the decision in this case study were up to me, I would not hesitate to shut down operations in Sri Lanka at the present time instead of waiting another six months. The reason for this decision is two-fold. Firstly, it is quite clear that there are numerous other members of this company that are in favor of abandoning its operations in Sri Lanka and conducting them elsewhere. Perhaps the most eminent of these is Landon who, as a member of upper level management, has a viewpoint that should considerably affect all employees who hope to have a future with this company. Additionally, it is clear that people in finance are unwilling to prolong operations in Sri Lanka. Their likening of doing so to a charity organization certainly emphasizes this fact. Moreover, the reality that the company would have…

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