Ethical Assignment Example | Topics and Well Written Essays - 1000 words

Ethical - Assignment Example This shows how valuable the managers are in ensuring that the needs of the stakeholders are met, and ensuring the success of the organization. The major conflict that can occur between the shareholder and the manager is agency conflict. When the manager is employed to take responsibility of leading the company, what is created between him and the shareholders is what is referred to as an agency relationship (Wijesekera, hubpages.com). The manager performs many duties, but delegates the authority of making decisions to the shareholder although he may also hold a small percentage of capital shares in the company. The shareholders are much separated from the management; they have little time to monitor the operation of the company, and cannot have an opportunity to fully assess whether the manager is acting in the best interest of the shareholders. Agency conflict occurs when there is conflict of interest between the manager and the shareholder. The shareholder may want to invest on a long term project, while the manager wants to make short term projects. He may be tempted to go on with this plan without necessarily informing the shareholder, because he has the capacity to run the company affairs. Wijesekera informs that the manager may be motivated to award himself and the staff better working terms and conditions (hubpages.com). The issue of managers holding back some information from the shareholders is unethical according to the business code of conduct. Company managers are always on a much better informed position on matters regarding the company than the shareholders, and while they have bigger opportunities to make the company progress with lots of profits and making successful ventures, they also have the chance of making the company fail; this is because they have much information than any other person in the firms (Gayle and Miller 2). A manager therefore stands a chance of deciding what to reveal and what not to. The opportunity granted makes the