Assessing the Goal of Sports Products, Inc. Case

Managerial – Case study 1 15/9/2015

Case: Assessing The Goal Of Sports Products, Inc. Case

Establishing and monitoring goals within a company can be a very important task to undertake. Most important is to ensure the stakeholders are considered while creating the goals the company. While the conversation that being discussed by Loren and Dale unfold some company concerned, they have discussed about some important information to consider such as maximizing shareholder wealth, creating corporate governance and form ethical policies.

The company's proper goal is to maximize shareholder wealth, as measured by the market price of the firm’ s stock. A firm’s stock price reflects the timing, size and risk of cash that stakeholder expected from their investment. Financial manager should take an action by focusing on increase the value of firm’s future cash flow. As we can see from Loren and Dale discussion seem like shareholders stand at the end of the company consideration, while the stakeholders should bear most of the risk of running the firm.

An agency problem exists when there is a conflict between the agent and principal, and Sport products. The financial manager should to be maximizing the prosperity of the proprietor. From the case study we can see that, they have are conflicted in mutual goal which manager may have their personal objective. In addition, management’s actions in case of pollution control and spending their profits, they took an unethical approach and disposed contaminants in the nearby stream.