Topic 1 DQ 2 May 30-Jun 3, 2024 Using your Wall Street Journal subscription, select an article about any publicly traded firm that enjoys a large shareholder base. How has the company incorporated ethics into the financial management practices? Discuss what challenges the firm has encountered (or is likely to encounter) and how they have sustained ethical practices

Topic 1 DQ 2

May 30-Jun 3, 2024
Using your Wall Street Journal subscription, select an article about any publicly traded firm that enjoys a large shareholder base. How has the company incorporated ethics into the financial management practices? Discuss what challenges the firm has encountered (or is likely to encounter) and how they have sustained ethical practices despite internal or external (market) pressures. Frame your response relative to the financial manager’s fiduciary duty to maximize shareholder’s wealth.

Submitted on:

May 30, 2024, 4:55 PM

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RC

Rufina Chukwu
May 30, 2024, 10:16 PM

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Hello Everyone,

Amazon, a publicly traded company with a substantial shareholder base of approximately 10.19 billion outstanding shares (Ajjoub et al., 2020), integrates ethical principles into its financial management decisions. These principles include protecting confidential information, prioritizing safety and quality, ensuring fair employee treatment, conducting marketing and sales activities ethically, and engaging in community initiatives (Brigham and Ehrhardt, 2020).

Furthermore, financial managers are tasked with maximizing shareholder wealth (Nave & Ferreira, 2019), which may lead to ethical compromises in pursuit of profit maximization. Hence, it is crucial to rigorously monitor internal financial activities to prevent any unethical conduct that could tarnish the company’s reputation and customer trust. Additionally, establishing a clear Code of Ethics and Conduct for employees is vital to circumvent ethical quandaries, supported by a team to oversee compliance and address any ethical violations (Nave & Ferreira, 2019).

Internal challenges may arise from the need to alter established practices, necessitating significant re-learning. Resistance from employees is possible, as fostering an ethical corporate culture demands extensive commitment without immediate financial benefits, potentially impacting shareholder returns. Despite its size and established SOPs, Amazon’s reputation for ethical business practices is not prominent. Thus, any shift towards ethical operations would require a fundamental transformation of its daily procedures.

References:

Brigham, E. F., and Ehrhardt, M. C. (2020).Financial management: Theory and practice [withMindTap] (16th ed.). Cengage Learning. ISBN-13: 9780357252680

Ajjoub, C., Walker, T., & Zhao, Y. (2020). Social media posts and stock returns: The Trump factor.International Journal of Managerial Finance,17(2), 185-213. Nave, A., & Ferreira, J. (2019). Corporate social responsibility strategies: Past research and future challenges.Corporate Social Responsibility and Environmental Management,26(4), 885-901

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