Ethical Issues in Business

2. Ethical Issues in Business. It seems that every day in the news we atomic number 18 hearing of new company that has acted at least u authorisehically and possibly illegally in the operation and financial reporting of their companys business dealings. there argon many ethical issues in business. hotshot major issue that we see is over and under reporting net income. Companies like to show that every quarter the net income of the business has an make up or profit. In ordering to show this they adopt unethical or illegal means in the operation and financial reporting.One such system is the indiscriminate use of stock options for employees that enable companies to take employment be off balance sheet and inflate earnings. With the recent ethical issues we urinate had companies over the years it is important that we pay close attention to financial reporting provided by companies. This method bequeath reduce the equilibrium expenditure and change magnitude equilibrium quan tity for this companys products and services. The reason for this is that the wage is bill is shown rase than what it actually is. This causes the furnish make out to shift to the right.With an summation in supply, if the substantial is a monopoly/oligopoly/monopolistic competition, thither leave alone be a line of descent in the price of the product of the firm. In case the firm is operational in perfect competition, there volition only be an increase in the quantity the company sells in the market. The scenario described above indicates that there is a shift in the supply curve, in other wrangle the cost are shown to be lower than what they actually are at the time. The supply curve shift to its right but its elasticity is non affected.As the method described above does not relate to shoot, the elasticity of motivation is not directly affected. Any market structure, perfect, monopoly, oligopoly or monopolistic competition, the equal ethical issues arise, the salary c ost is underreported because of the use of stock options. This means costs are shown at a lower rate and profits are inflated. The decision to show inflated profits is unethical. From the deontological ethical perspective it is the obligation of the management to show the correct profits and not inflated profits. Chapter 3, inquire 14Assuming that the demand and supply for agiotage coffees are in equilibrium, the price will be at a constant, without signifi slewt pressure from the market. If Starbucks introduced the world to premium blends, this would cause a positive shift in the demand curve. There a higher equilibrium price and higher quantity when demand increases and supply remain unchanged. As prices increase, and the market moves to a new equilibrium, we will see higher wages, more advances and investments in technology and infrastructure, and greater competition.As takings become more efficient and competition becomes greater, supply will increase and cause prices to set tle back down. There are several factors that will have-to doe with the long-term equilibrium, such as changes in supply. For example, if a hard freeze eliminated Brazils premium coffee crop, this would cause a negative shift in the supply curve. Assuming demand dust constant a negative shift in the supply curve will cause quantity to decrease and equilibrium price to increase. research shows that in 2011 a frost occurred in Brazils southeastern coffee ontogenesis belt.Traders worried that next years yields could be hurt. At the same time, heavy rains during harvest home forced Columbia to reduce its crop estimate for 2011. Understanding the jar of problems along the supply chain and how the changes in supply will impact prices in the market allows real world investors to make predictions of price in the future. This is important for businesses along the supply chain as well, in order to stay ahead of the curve when reservation strategic business decisions. ? Chapter 5, dist rust 17Assuming there is a large rise in the demand for figurer hitchs and murphy break outs. Potato chips manufacturers will be able to respond to a rise in demand quicker than a com jeller chip manufacturer. This is due to the fact that potatoes are more readily available, and the process for making potato chips is not as involved or difficult. The tools, materials and highly handy labor force it takes to manufacture computer chips are more compound and will require more time to complete. Both manufacturers may try on to ramp up production by adding another shift to the alert production line.Another option in the short run may be to contract another company to assist with the manufacturing as the demand increases or purchase/rent additional equipment to expand the production lines as requisiteed to keep up with the demand and process request. In the overall tough picture the positive shift in demand will put pressure on the market for increased competition. In order to carry market share and maintain competitive advantage, both(prenominal) manufacturers will need to deliver value to the customer either in the form of a differentiated product or lower prices. In the long run, both of these priorities will be achieved through investment.A decision will have to be made that either investment in more efficient production and supply chain management, or more investment in a better product that stands out in the market. The long run achievement will also be dependent on the abilities of the entire supply chain to keep up with demand. If the demand is large but you are unable to meet the demand and supply the products it means nothing. The disadvantage of the potato chip company is that no matter how many potato chip factories you build, the manufacturer is still at the mercy of how many potato crops can be grown in a given season.