I’m working on a finance discussion question and need guidance to help me understand better.
Your week two discussion requires you to address the following issue;
Education unlimited Inc. produces very specialized adaptive educational products. The CFO of Education unlimited Inc. Bill M became aware that a major customer of theirs is closing a majority of their academic campuses and thus the demand for Education unlimited products is likely to be affected significantly. Education unlimited Inc. president and CEO, Jon M, was very concerned but still asked Bill not to disclose that information due to the potential effect on the stock price. To make things worse for Education unlimited Inc. questions about the efficacy of the adaptive products is being questioned by the vice president for assessment Doug M, which if valid is likely to affect the demand for the products even further. Jason M, the company’s production manager, hears the announcement of the campus closing and stops Bill M inquiring about the truth of the campus closing and the efficacy issues.
Are there any ethical issues, should any of this information be disclosed to the public, and what is the position of the relevant professional body (the IMA) ? Make sure you respond to at least two of your classmate’s posts. The rubric for this discussion is as follows: 5 points for posting by Thursday ( the initial post) and 10 points for the content of the primary post and 5 points for the content of each of the two secondary posts.
first, respond student
Company managers have a responsibility to keep the company growing and to set up and maintain a culture of integrity. This integrity is important not only for shareholders who should know everything, good and bad, happening in the company but also for the employees who should be focused on the daily task of keeping the company moving.This scenario highlights the fact that this company has serious corporate integrity problems that should be placed at a higher priority than simply worrying about the closing campuses and resulting loss of revenue. While the stock price may take a temporary dip, it is far more important that the company managers ensure the integrity of the company comes front and center with an honest and immediate report to shareholders about the situation. Bill M, as the CFO, has the responsibility of ensuring shareholders are made aware of problems regardless of the feelings of others, though it would seem the CEO, Jon M, is actively working against a culture of integrity. Also, the scenario mentions Jason M, the production manager, stopped Bill M from asking about product efficiency. This could be either a result of either his feeling that his job would be brought into question or that the jobs of his employees might be at stake. In any case, the IMA has a firm stance that “corporations should establish a culture of business ethics to promote integrity among their employees and gain trust from key stakeholders, such as investors and consumers.”
second, respond to student
One of the major ethical issues is that the insiders in the Education unlimited Inc themselves when they conceal information from each other. That lack of transparency in the information circulated within the organization and again even if it is circulated within said organization no one is showing proof. One example could be when the vice president decides to ask for the efficacy situation and say that the CEO is doing everything possible to conceal information. When anyone in an organization whether that is a huge company or even a small company does it’s best to hide information and keep secrets it can lead to having mistrust in the company and that can cause sales to drop, miscommunication, people deciding to quit and people getting fired and ultimately can lead a lot of disorganization in the company as a whole. Concealing information from owners of said company such as the shareholders is without a doubt contributing to at the time success within the company but that success could be stopped or cut at any given time which results in further damage of all the hard work ethical or not that has been done. In the long run affecting those who have gotten work done the ethical way.
A known fact that there is a breach of business ethics that does demand transparency in the system and the conveying of all information to stakeholders.
The role of the IMA would be to constantly be monitoring the success of Education Unlimited and keep sending external auditors which is to ensure the compliance of the Academy.
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