Increasing economic interdependence prevents executives and managers at a firm from manipulating corporate actions for their own benefit.

Question

Quizplus · Accepted Answer

A serious ethical problem arises from economic interdependence and the modern corporation, which is the structure of most large businesses in this country. The problem is that the corporate leaders are not the real owners of corporations. The stockholders are, and although corporate executives and managers may own some stock, they seldom own significant percentages of very large companies. The ethical problem that can arise is that the executives and managers who control what the stockholders own are sometimes able to manipulate corporate actions for their own benefit, actions that have unacceptable risks to the owners and others. Increasing economic interdependence promotes concerns about business ethics.

Increasing Economic Interdependence Prevents Executives and Managers at a Firm