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This is because in case Jill’s operating costs rise and is not able to sell product at high price in the market bank will have default risk and will also face potential payment risks by Jill. Second stakeholders are the employees which might be fired from job because the company might not need them for the more automated system of production. Also, employees with older skills of production might be affected as they will no more be suitable for the job of new production process. Next stakeholders to be effected are customers who might face the issue of high prices in case of high product cost to Jill. Company’s first aim is to cover their costs and hence if Jill’s costs rise with the new equipment it might price the product at a slightly higher price which might not be acceptable to the customers. Lastly, competitors would be affected by this action. This is because competitors might lack the new mode of production and hence they might not be able to produce efficiently compared to Jill’s company. At the same time competitors might also gain as in case Jill raises price of the product, competitors can increase their sales by keeping low price of their product. Changing production technology is what is of more concern and convenience to the internal management of any company and customers have nothing to do with it. So, Jill’s decision might have no effect on its reputation. Hence Jill should think of saving her costs rather than following her high cost passion blindly. (b) Ethics can be defined as any action which synchronizes with the generally accepted principles of right and abandons the wrong. Ethics in business follow the rule of true, accurate and complete information sharing among all the parties with the disclosure of benefits as well as risks of any project. In this case, benefits are being portrayed to the bank by Jill in a very reasonable manner but at the same time. CVP analysis and fixed costs control problem is hidden by Jill because of the fear of not getting the loan from bank. Ethical concern in this case is the true and fair representation of information as the information provided by Jill to bank is not accurate and does not represent every side of the picture. Jill has highlighted the benefits of this project to the bank only in order to get the loan but has been hiding the information of high fixed costs due to this new production equipment. So, Jill has been showing the bank only the bright side of this project and ignoring the area which can bring concern to the management of bank. In this case, bank can be in trouble in future with a high risk of default in case Jill is not able to sustain profits with this new investment. So, Jill is unethically showing the wrong and incomplete side of the picture to bank. © I would think ethically and ensure that I share the full and accurate information with my bank. When we put a proposal in front of a third party who is going to put at stake the money of another third party(bank’s customer) in our business, there is a need to be very sensitive towards all the two parties involved one directly and other one indirectly. So, I would ensure to share the complete results with my bank and appeal for loan. This is because being ethical is the major concern for any business and I would never like to be the reason of trouble for my stakeholders especially those who have invested their money and the ...Show more

Summary

CASE 1 (a) Stakeholders include all those parties which hold a direct interest in Jill’s business and are affected by any and every action the organization takes. These parties include not only the customer, shareholders if any but also the suppliers, employees, government, investors which in this case is the bank and government…
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