Business Ethics Objectives Describe The Responsibilities Of

Business Ethicsobjectivedescribe The Responsibilities Of A Financial M

Describe the responsibilities of a financial manager.

Discuss the ethical responsibilities of a financial manager, including identifying the ethical issues involved in a given scenario. Consider what most managers might do in such situations and analyze the implications of these actions.

Paper For Above instruction

Business ethics play a vital role in shaping the decision-making processes within organizations, particularly for financial managers responsible for safeguarding stakeholders' interests while maintaining organizational integrity. The responsibilities of a financial manager encompass not only maximizing shareholder value and ensuring financial stability but also adhering to ethical standards that foster trust and accountability (Boatright, 2012). In this context, examining the ethical responsibilities involves understanding the complex scenarios managers face, especially when balancing short-term gains against ethical principles.

One ethically charged scenario often encountered by financial managers involves managing accounts payable, as exemplified in the case titled "Doing Your Duty When Payables Come Due." In such situations, managers are confronted with critical decisions: should they prioritize paying their vendors on time, even if it compromises their company's cash reserves, or delay payments to conserve cash, risking damage to supplier relationships and reputation? These choices involve core ethical issues related to honesty, fairness, and duty of care.

The primary ethical issues in this scenario include integrity, transparency, and loyalty. A financial manager must ensure accurate financial reporting and honest communication with stakeholders (Ferrell, Fraedrich, & Ferrell, 2019). Ethical conduct mandates that managers avoid manipulating financial statements or delaying payments in a manner that misleads creditors or shareholders. Moreover, they bear a duty of loyalty to their organization while also considering the impact on external partners such as suppliers and creditors. This creates a tension between internal organizational needs and external ethical obligations.

Most managers, faced with imminent payables, tend to respond based on their ethical orientation, organizational culture, and external pressures. Some may prioritize prompt payments to uphold trust and preserve long-term relationships, recognizing that maintaining ethical standards often results in better reputation and stakeholder confidence in the long run (Lugli, 2020). Others, driven by immediate financial pressures, might delay payments to safeguard short-term cash flow, risking ethical breaches and reputational damage if these actions are perceived as dishonesty or neglect.

The implications of these actions are significant. Liberal delaying of payable obligations, if justified by a genuine financial crisis, may be seen as a temporary and ethically acceptable measure. However, habitual or strategic delays undermine trust and could lead to legal consequences, damage supplier relationships, and harm the company's reputation. Conversely, adhering strictly to ethical standards—even in tough financial times—can strengthen stakeholder trust, support long-term success, and align with corporate social responsibility principles (Crane, Palazzo, Spence, & Matten, 2014).

In conclusion, the ethical responsibilities of financial managers fundamentally involve balancing organizational objectives with honesty and fairness. They must navigate complex dilemmas, like managing payables, with integrity and conscientiousness. Employing ethical frameworks and emphasizing transparency can help managers make decisions that sustain organizational reputation and stakeholder trust, ultimately contributing to sustainable business success.

References

• Boatright, J. R. (2012). Ethics and the Conduct of Business (8th ed.). Pearson.
• Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the Value of "Creating Shared Value". California Management Review, 56(2), 130-149.
• Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2019). Business Ethics: Ethical Decision Making & Cases (12th ed.). Cengage Learning.
• Lugli, A. (2020). Ethical Decision-Making in Business. Journal of Business Ethics, 162(2), 251-263.