Faith Integration Essay: Ethical Issues
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Faith Integration Essay: Ethical Issues
Malik Arnold
Liberty University
Professor Wilson
BUSI 690-D06
5/5/2015
Faith Integration Essay: Ethical Issues
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Faith Integration
11.1 As noted in Chapter 5, many public firms are under intense pressure for short-term
financial improvements. How might such pressure, in combination with output controls, lead to
possible unethical behaviors?
The pressure being placed on public firms for financial improvements originates from the
restrictions being placed on the stock exchange and automated quotation systems by NASDAQ
National or Small Cap markets. These restrictions require companies to meet stringent commerce
and regulatory guidelines that are generally difficult to achieve in the organizations’ beginning
years of operation. Once a company has been accepted as a public firm, the market introduces
IPO citations that require the company to issue public offerings to institutional investors, who in
turn release these shares to the public for sale (Hsu, 2013). Large and small cap markets use
these procedures to transform private companies into publicly traded enterprises; raising
expansion capital at relatively higher than normal levels, as well monetizing investments for
investors operating in the private sector. Initial public offerings (IPO) can be a hinder to
organizations because they require a company to have a clear and complete understanding of
their core business infrastructure. It is at this point that ethical issues could potentially arise as
managers begin to face the pressure from executives and shareholders to quickly transition their
department to meet operational standards.
Output controls play a part in fueling unethical behavior due to the pressure it places on
departments to publicly display their efforts and performance towards strict evaluation
requirements. Top managers use various financial measures to evaluate performance within this
procedure. Profit rations are evaluated by managers to measure how efficiently staff is using the
organizations resources to generate profits (Rothaermel, 2013). Return on investment (ROI) is
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the company’s net income before taxes, divided by its total assets (Rothaermel, 2013), and is
most commonly used to evaluate a company’s financial performance. Managers facing pressure
from staggering ROI ratios may begin to practice unethical behaviors by finding faster ways to
gain more profit, even if it meets violating regulation procedures. Gross profit margins are also
affected by the flow of output controls and provide information about how efficient a company is
operating in utilizing its resources for business. For instance, a company that has established
incentives based on shipped sales and/or gross margins may have programs in place that create
pressure for short-term results, and the shorter the time period for assessment, the greater the
number of problems with the department (Tunick, 2002). Managers begin to become concerned
about what could happen if sales goals are not met and problems arise if tiered incentives exist,
such as lower incentive on lower sales or margin and a higher percentage in the same sense. This
can cause managers and employees to move sales from one accounting period to the next,
falsifying records and showing numbers that are not actual to the current period under review.
Investors have found that output controls offer multiple problems towards a company’s
goals to motivate staff and may lead to unethical behavior or short-term emphasis; thus, making
the controls less responsive to implementing change. Managers must be sure that the output
standards motivate all managers and do not cause managers to behave in inappropriate ways to
achieve organizational goals (Bruton & Prasad, 2008). Studies find that an array of problems
could occur if the company’s standards are unrealistic or not aligned with the overall goal or
direction of the infrastructure’s plan. Managers within these departments must be able to focus
on the long-term objectives of the executives and shareholders that have invested their time and
money into the longevity of the organization. The inappropriate use of output control systems
can lead lower-level managers and workers to behave unethically (Tunick, 2002). One reason
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these results are triggered is because the output controls are not flexible enough to accommodate
the changes that continually occur in the business environment. In this instance, if conditions
were to change, top level managers need to be able to effectively communicate accurate
resolutions to lower level managers to ensure the company’s goals and standards are satisfied.
The word of God gives clear and concise direction towards how Christians should
operate throughout the working environment by challenging unethical actions with moral
provisions to abide by. Romans chapter twelve reads, “Do not be conformed to this world, but be
transformed by the renewal of your mind, that by testing you may discern what is the will of
God, what is good and acceptable and perfect” (Romans 12:2, English Standard Version). God
understand that not all Christians will work in business environments conducive to Christian
standards, however, we are advised to “do all unto the Lord”; meaning we should all honor God
in our actions and performance in the workplace, as well as life in general. Managers who are
dealing with pressure from business processes and systems must be able to balance out their
efforts with what is right and wrong. It is when we try to control our lives on our own that we
lose sight of our creator and the plan God has for our lives, honoring HIM through all hardship is
the only true way to find peace and a purpose in our own lives.
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References
Bruton, G. D., & Prasad, D. (2008). Strategy and IPO market selection: Implications for the
entrepreneurial firm. Journal of Small Business Management, 35(4), 1-10. Retrieved from
http://search.proquest.com/docview/220956572?accountid=12085
Hsu, C., Yu, J., & Wen, S. (2013). The analysts' forecast of IPO firms during the global financial
crisis. International Journal of Economics and Financial Issues, 3(3), 673-n/a. Retrieved from
http://search.proquest.com/docview/1392996276?accountid=12085
Rothaermel, F. T. (2013). Strategic management concepts and cases (Custom package). New
York, NY: McGraw-Hill. ISBN: 9780073535166.
Tunick, B. (2002). Tale of two exchanges: CME's upcoming IPO has nasdaq watching. The
Investment Dealers' Digest : IDD, , 1-15. Retrieved from
http://search.proquest.com/docview/198285509?accountid=12085
