Management Ethics Case Sections

MANAGEMENT CASE STUDY 4

ManagementEthics Case Sections

MechanismsSection

Anothermechanism is to incorporate the management in the shareholdingframeworks of the company. This can be done through an optimizedemployee shareholding scheme to allow employees, especially topmanagers have equity interests in the company. The scheme is bestimplemented when an organization incorporates the management into thedecision making processes of the firm from the perspective ofshareholders. This will effectively merge the interests of themanagers with the wealth creation interests of the shareholders.According Tricker and Tricker (2002), employee shareholding schemesmakes employees motivated to promote the company’s capital growth.This way, the interests of the management are drawn from personalwealth to company wealth creation.

Finally,the mechanism of regular employee evaluation and performanceappraisal would be beneficial for the company in promoting ethicalcorporate governance. Through the use of the generally acceptedcompany management practices and ethics as the benchmark, the companywill effectively evaluate the performance of the management.Moreover, the use of performance contracting in the appraisal of themanagement will allow the company to hold the responsible management.This means that the company will have the right to terminatecontract, punish or caution the management based on the performanceof the company. This is because the performance of the company in allthe sectors will reflect the decisions made by the management.According to Doreen et al (2010), appraising employees based on theperformance of the company is effective in holding them accountablefor their actions. Therefore, Nortel Corporation can effectivelyalign the interests of the management through performance-basedappraisal.

Conclusion

Managementethics are important elements of management of an organization, asillustrated in the case of NortelNetworks Corporation. Due to practice of management ethics, thecorporation lost significant financial resources through its leaders.This loss and unethical acts negatively affected the company`scapitalization from an all time high to a low margin for a firm ofits size. Due to poor management, ethics, the management pursuedtheir personal wealth at the expense of the company. The company canadopt an employee stock sharing mechanism as a way of making themanagement part of the company`s shareholders to align theirinterests. Moreover, business education and regulation of punishmentswould be the measures to prioritize, in addition to otheralternatives like regulation of incentives and financial control atthe firm.

References

Dooren,W.,&nbspGeertBouckaert, G., &amp Halligan,J. (2010). PerformanceManagement. New York: Routledge

Tricker,B., &amp Tricker R. I. (2012). CorporateGovernance:Principles, Policies and Practices.Oxford: Oxford University Press