American Airlines Assignment Example | Topics and Well Written Essays - 1250 words

American Airlines - Assignment ExampleThis can lead to unethical activities when the older solicitude and organization can gain significant rewards because of the short-term concentration on inventorying(a) price (Machan, 2007). The senior guidance whitethorn tolerate organizational conflict of interest, abusing a number of rules of fair conduct or normal decency, gaming the rules of the society, and turning to cronyism as a means of making the most of their self-interest. Senior management troubled with the stock price of the company too concentrates on performance events that be short-term, often earnings. As a result, the senior management holds a commonly emphasizing fascination with short-term performance of stock prices. The senior management can engage in unethical behavior because profits are presumed as the most extensively conventional metric. Senior managers who have the capacity to consistently and correctly forecast the stock prices can gain tremendous profits. Th is prediction may suck the senior management use gaga profit assessment. They may view the logical model of analysis as theoretically adequate further sensibly not connected from the anticipated earnings. The senior management may refer to the activities of market players to make a case out of their short-term focus on stock price (Machan, 2007). Encouraged by the view that stakeholders look at the current stock prices to determine value, they may repurchase shares even when they may be overvalued or fairly valued. Question 2 The conduct of American Airline controlling its cash in hand by postponing the maintenance of its aircrafts may be unethical to both the stakeholders and clients. Shareholders are perceived as a unit that endures a build of danger as a result of investing some kind of capital, fiscal or human based shares in a company. On the other hand, clients are presumed to be a group that endures some form of risk during their travels. When stakeholders and clients su ppose that finances are being manipulated, a company consequently decreases worth on the stock market. The credit rating of the company will go down making the issued bonds to decrease in worth (Capozzi, 2001). Consequently, this will have a negative doctor on the wealth of bondholders. American Airlines has had recurring issues with regard to maintenance of its aircrafts. The expenditure connected with operating these aircrafts has a negative impact on both stakeholders and clients. American Airlines has an ethical obligation to both stakeholders and clients to ensure that its aircrafts are well maintained. The airline also has an obligation to give correct details on the states of their aircrafts to both stakeholders and clients. When American Airlines postpones the maintenance of its aircrafts thereby influencing earnings, it means the company is not giving the true picture about its financial situation. In addition, the behavior is unethical towards the clients because aircraft s may pose risks that the clients are not aware of. The company also canceled a number of flights due to postponing aircraft maintenance in 2008. The company