Business is a very complex field. So, there are many different situations, goals, etc. that arise. To solve these issues and attain a certain target one must be a critical thinker. Being a critical thinker is important because you question, explore, research, validate information, and come up with other solutions to reach the correct answers of a problem and/or questions.
Thinking critically is the ability to analyze a goal or concept, as well as considering the facts and differing perspectives, to reach a strategic and optimal conclusion. By knowing how to think critically, it allows an individual the influence to make productive contributions to one’s industry. In addition to that, such analytic tool utilizes information to strongly support any claims that arise in order to persuade an audience. For example, as a marketing analyst within a company, one will need the ability to have a keen critical thinking in order to create and manage successful marketing campaigns. They must be able to gather and analyze demographic information about an organization’s target audience in order to know how to reach customers very effectively when promoting their product or brand. Successful critical thinking will lead a business to outperform other competitors and have a competitive advantage in their profitability
Companies should emphasize on maximizing shareholder wealth; instead, of maximizing profits. Companies can maximize profits for the short-term but create a long-term cash flow issue. By focusing on maximizing shareholder wealth through social responsibility and integrity, companies are creating a stable future “from top to bottom.” Using the phrase “from top to bottom” means just that. Everyone one from the top shareholder to the bottom employee should be invested in maximizing shareholder wealth. Managers can achieve this by creating social responsibility and taking a vested interest in their stakeholders’ wealth.
Social responsibility benefits long-term stock prices as the market deems socially responsible firms less risky (Forte, 2013). To further achieve this vested interest, the companies should demonsSocial responsibilitytrate their integrity by develop a code of ethics. Companies that invest in social responsibility and demonstrate their integrity, often create a feeling on internal value amongst its employees. This can create a more positive corporate image, build shareholder confidence, gain the loyalty, commitment, and respect of stakeholders, and positively affect share prices (Gitman & Zutter, 2015). A Choi and Pae surveyed 252 firms and found evidence that the companies with a higher level of an ethical code are associated with better quality financial success (Chu, C. Gotti, G., Kang, T., & Wolfe, M. C., 2018).
Looking at the big picture, a company should emphasize both shareholder wealth while also making an effort to maximize profits. Ultimately, they are responsible for representing the shareholders who are the actual owners of the company. This can be tricky depending on how many shares of preferred stock the company has outstanding compared to the common stock. Additionally, the company represents other stakeholders who have a vested interest in the company’s overall value and well-being.
Ethics must play a role when a company is making a decision that can affect profits or shareholder wealth. Although it may seem logical to maximize profits in the short-term, the common stock holder’s position must be considered. In the event a company loses focus on the long-term goals and the company fails, the shareholders of the common stock are paid last. With that being said, unethical decisions may lead these shareholders losing money.
After watching the clips, I can understand both positions. Taking into consideration the seemingly inevitable fate of the company, I believe the ethical decision would be to sell the company. The reason for my decision is based on the estimated value of the company and the fact all stakeholders would walk away without taking a loss. Keeping the company open with the optimistic hopes of future spikes in revenue is extremely risky. Not only can the common stockholders lose the profits they have already made, they may lose their initial investment as well. While selling gives the shareholders the option to re-invest their money elsewhere.