BLE 215: Midterm This is not a group project. Each question must be answered separately. Use course...

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BLE 215: Midterm This is not a group project. Each question must be answered separately. Use course materials to elaborate on your answers. The examination must be handed in during the regularly scheduled class period. Please do not e-mail your exam. The exam should be a minimum of 4 pages, excluding the cover sheet with your name and the date. Please staple the pages together. Use 1 inch margins with lines double spaced. Required font: Times New Roman 12. Do not repeat the questions in the body of the paper.
	
Document Preview: BLE 215: MidtermThis is not a group project.  Each question must be answered separately. Use course materials to elaborate on your answers. The examination must be handed in during the regularly scheduled class period.  Please do not e-mail your exam.  The exam should be a minimum of 4 pages, excluding the cover sheet with your name and the date.  Please staple the pages together.  Use 1 inch margins with lines double spaced.  Required font:  Times New Roman 12.  Do not repeat the questions in the body of the paper.  “Course materials” means cases, examples, articles, lecture notes, films, etc. as presented in this course.  Refer to readings in the text and to any postings on Black Board.Question 1 (25 points)Joseph Johnston argues, in his article, Natural Law and the Fiduciary Duties of Business Managers that…”Simply put, stakeholder theory sounds good in social theory but will not work in practice.”Explain his reasoningDo you agree or disagree?  Make sure to explain your reasons and use course materials* to support your argument.Question 2 (25 points)Steven Kellman provides a critique of the cost/benefit analysis and whether it leads to a “flawed ethical result.”Do you agree or disagree with his analysis? Make sure to explain your reasons and use course materials to support your argument.Explain the value of corporate sustainability using course materials.III:	Question 3 (25 points)Explain Edward Freeman’s model of Stakeholder Analysis and how it applies to corporate social responsibility.  Does it conflict with the fiduciary duties of management and the board of directors to maximize shareholder wealth? Explain your reasons. IV:	Question 4 (25 points)Read the attached case study (Hosmer Case 3-1).Using the Hosmer model, answer the following questions below.  What groups will be benefited by shipping the defective wafers to the inner city?What groups will be harmed by shipping the defective wafers to the inner city?What groups will be able...

Robert · Accepted Answer

I. Joseph Johnston: Practicality of Stakeholder Theory 
Stakeholder model of the corporate governance assert that creditors, employees, customers, 
suppliers, and communities tend to make “firm-specific” contributions for a company, so that 
the directors of the company should have responsibilities to all of them. While the traditional 
shareholder model assert that the businesses are conducted in a view to maximize shareholder 
gain and corporate profits. Most of the American companies take the traditional model for 
consideration due to lack of practicality in the stakeholder model. A business cannot run if 
the interests of all the stakeholders are taken into consideration. 
The stakeholder model proposes that the managers have duty to creditors, employees, 
and other stakeholders which is nothing but equivalent to duty owed to the shareholders. 
There are many difficulties that arise in serving multiple masters. A conflict of interest is 
obvious between the stakeholders and shareholders. For instance, the management of a firm 
decides to close down an unprofitable plant, the employees and community will suffer from 
the decision, but the shareholders will be benefitted from the closure. The managers should 
have clear consensus on whose value comes first, shareholders or stakeholders. If they are 
uncertain about that, they will be in a catch 22 situation and cannot make decision. The 
interests of all the stakeholders cannot be given equal consideration as directors will either do 
nothing or make political compromise, but they cannot make a business decision at all.  
In my opinion, Joseph Johnston has rightly asserted that stakeholder model cannot be 
implemented practically. The business of the business is to do business and they can exercise 
corporate ethics and corporate social responsibility alongside. Every stakeholder has his own 
interests and it is more likely that it will have conflict with others interests. If company 
considers the interests of one stakeholders, the other stakeholders may not be satisfied. The 
company needs to decide whose value should come first so that the managers can make firm 
decisions. Considering shareholders put their money in the business, their value should come 
first and they should be given due importance while making decisions,

BLE 215: Midterm This is not a group project. Each question must be answered separately. Use course materials to elaborate on your answers. The examination must be handed in during the regularly...

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