Individual Assignments from the Readings

Individual Assignments from the Readings

A. What should the management of Sports Products, Inc. pursue as its overriding goal? Why?

The management should pursue making sure that the investors get the best possible return because the financial benefits for the investors looks good for the firm, thus reflects positively against the firm’s image

B. Does the firm appear to have an agency problem? Explain.

Yes, the firm does appear to have an agency problem with the firm because it is placing its needs over the shareholders’ needs.

C. Evaluate the firm’s approach to pollution control. Does it seem to be ethical? Why might incurring the expense to control pollution be in the best interests of the firm’s owners despite its negative effect on profits?

It is apparent that they are violating the law with dumping pollutants in the adjacent stream and damaging the environment. These actions are clearly unethical in behavior. Incurring the expense to control pollution is in the best interest of the firm’s owners as it warrants the firm’s long term profits in case of collective accountability.

D. Does the firm appear to have an effective corporate governance structure? Explain any shortcomings.

The firm does not have an effective corporate governance structure. The leading significant shortcoming is that the management team does not make good decisions for capitalizing on shareholders’ wealth, consequently a new team should be considered.

E. On the basis of the information provided, what specific recommendations would you offer the firm?

The firm undoubtedly has to make major changes. The management is top priority; therefore, it is recommended the team is restructured. Once reorganized, an ethics policy should be created,