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Finance & Accounting
Pages 5 (1255 words)
American Airlines Student’s Name: Professor’s Name: Course Title: Date: American Airlines Question 1 The short-term concentration on stock price by senior management in a public traded corporation may promote unethical activities. An increasing body of investigation founded on both comprehensive case studies and laboratory examinations, indicates that all people are at risk of misjudging individual capacity to engage in what is perceived as correct and therefore a number of times behave in an unethical way without intending to…
This can lead to unethical activities when the senior management and organization can gain significant rewards because of the short-term concentration on stock price (Machan, 2007). The senior management may tolerate organizational conflict of interest, abusing a number of rules of fair conduct or normal decency, gaming the rules of the society, and turning to cronyism as a means of making the most of their self-interest. Senior management troubled with the stock price of the company also concentrates on performance events that are short-term, often earnings. As a result, the senior management holds a commonly emphasizing fascination with short-term performance of stock prices. The senior management can engage in unethical behavior because profits are presumed as the most extensively conventional metric. Senior managers who have the capacity to consistently and correctly forecast the stock prices can gain tremendous profits. ...
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