how a totalitarian regime would impact a corporation's ethics, or would it?
2 answers
Do you want to work for a corporation that dictates from above? Or would you rather work for an organization that listens to its workers? Which would be more ethical?
I don't think the question is asking about a totalitarian regime in the form of the managers of the firm. I think the question is asking if the nation's government is totalitarian.
Regardless, it doesn't matter whether a corporation listens to its employees; rather, it matters that the corporation maximizes value for its shareholders. That, for the most part, is the sole responsibility of a firm. They are to accomplish this ethically and legally.
Now, if the country within which a firm operates has a totalitarian regime running it, there could be several issues that come up for the firms management. First, the government could attempt to extract funds from the company by imposing its will upon it. In exchange for merely allowing the company to operate within its borders, the government could force it to pay. This reduces value for the shareholders.
Also, the government could attempt to create some sort of a wealth redistribution scheme, which would require the firm to pay excess taxes beyond what it should pay in order to subsidize other firms or individuals in the economy which are not able to keep up in the open market, but are "pet projects" of the government or something to that effect.
These situations could lead to the firm making non-optimal decisions for its shareholders, which could lead to financial trouble, meaning that the bond holders would then be in trouble. The point is to think about the above situations -- and others that you can think of given these examples, and come up with ways that a firm's decision making could be impacted to the point where they would begin making un-ethical decisions.
Hope that helps :)
Regardless, it doesn't matter whether a corporation listens to its employees; rather, it matters that the corporation maximizes value for its shareholders. That, for the most part, is the sole responsibility of a firm. They are to accomplish this ethically and legally.
Now, if the country within which a firm operates has a totalitarian regime running it, there could be several issues that come up for the firms management. First, the government could attempt to extract funds from the company by imposing its will upon it. In exchange for merely allowing the company to operate within its borders, the government could force it to pay. This reduces value for the shareholders.
Also, the government could attempt to create some sort of a wealth redistribution scheme, which would require the firm to pay excess taxes beyond what it should pay in order to subsidize other firms or individuals in the economy which are not able to keep up in the open market, but are "pet projects" of the government or something to that effect.
These situations could lead to the firm making non-optimal decisions for its shareholders, which could lead to financial trouble, meaning that the bond holders would then be in trouble. The point is to think about the above situations -- and others that you can think of given these examples, and come up with ways that a firm's decision making could be impacted to the point where they would begin making un-ethical decisions.
Hope that helps :)
3 answers