Global Business 3rd Edition by Mike Peng

Exercise 22

ON ETHICS: The text refers to the recent uproar over executive bonuses. Suppose you were CEO of a firm that lost $50 million, but you were given a bonus of $100 million, and thus you have been vilified in the media and brought before a Congressional committee that has accused you of financial outrage. However, you point out that the most optimistic forecast for your firm had been that it would lose over $6 billion. There was no change in markets, the economy, or anything else during the year other than the new strategy that you implemented-a strategy that reduced losses by $5,950,000 000 to only $50,000,000, and thus you feel that you were actually underpaid. However, the politicians feel that it still looks bad and that if you had been socially responsible, you would have refused the bonus. Do you agree? What is your response?