Question

1. Many financial managers and corporate officers are often criticized for (a) poor decisions, (b) lack of ethical behavior, (c) large salaries, (d) lucrative severance packages worth millions of dollars, and (e) extravagant lifestyles. Is this criticism justified? Justify your opinion.

Answer 1

The financial managers and the corporate officers are correctly criticized for poor decisions, lack of ethical behavior, large salaries, lucrative severance packages worth millions of dollars and extravagant lifestyles because

a) Poor decisions: The managers and the prime corporate officers are at the position where they have to take decisions under the all expected risks and probabilities. The decisions are taken in consultations with other officers and staff. Sometimes the decisions taken would not fit to the situation and the stakeholders starts complaining of loss due to bad decisions.

b) Lack of ethical behavior: The managers are officers have to handle all kinds of people and sometimes they have to behave unethically to run the organizations under profits for the Stakeholders, even-though they have full knowledge of the ethical behavior.

c) Large salaries and lucrative severance packages worth millions of dollars: The managers and officers have complete responsibilities of the organization operations and the generation of the profits of the business transactions, so their salary and benefits package have to be at premium against other staff members. The managers and officers have to be on job for 24 hours, so the premium salary and lucrative package is the compensation towards being fully concentrated on the organizations work.

d) Extravagant lifestyles : The extravagant lifestyles which managers and officers have to perform to keep the prestige of the corporate position at which they are placed. They have to expand a-lot to keep upto the maintenance of the lifestyle. The lifestyle is being maintained to make the organization benefits in turnover and profits.

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