The corporate world operates under a set of principles and obligations designed to ensure that those entrusted with positions of power act in the best interests of the company and its stakeholders. In this case, Profit V. FlickNet, Inc., the breach of fiduciary duties by the Board of Directors has not only jeopardized the financial stability of the company but has also sparked a legal battle with one of its stakeholders, Mr. Profit. Seeking $10,000,000 and damages to recover the losses incurred due to the plummeting price and value of the company's stock, Mr. Profit’s lawsuit underscores the gravity of the situation. The board of directors of FlickNet, Inc. flagrantly breached their fiduciary duties by failing to close underperforming stores …show more content…
Moreover, their wireless technology is out of sync with the needs of their customer base, hindering their ability to deliver a seamless streaming experience. Financially, FlickNet is struggling to stay afloat due to inadequate revenue streams. In a bid to turn things around, the company borrowed a hefty sum of $30,000,000. However, despite this infusion of capital, FlickNet lost 7% of its customer base to a more advanced streaming competitor. This setback has been reflected in the declining value of the company's shares, dropping from $25 to $18. The combination of these factors paints a challenging picture for FlickNet’s prospects, and underscores the urgency of addressing these crucial issues to secure its place in the competitive streaming market. FlickNet, Inc. has flagrantly breached its fiduciary duties as directors by engaging in actions that prioritize self-interest and personal gain over the best interests of the company and its stakeholders. One significant instance of this breach is the decision to borrow additional funds and instruct them into underperforming stores instead of closing them down, despite it being a financially unsound
In this paper I will identify and analyze the Wells Fargo scandal as it pertains to the breakdown of leadership and ethics. I will first identify and analyze the event and discuss the challenges and conflicts the scandal presented. Then I will evaluate the issue by explaining why the issue has interest and concern to stakeholders followed by discussing the challenges presented to individuals and/or organizations around this case. Lastly, I will recommend action steps that should be taken to those involved as well as discuss what I have learned from exploring this topic.
The idea inspired Reed Hastings and Marc Randolph, and then they founded Netflix in Scotts Valley, California in 1997 (Netflix, 2014). The company comes into play by developing a subscription-based streaming platform for movies and television shows. Unlike the traditional movie rental businesses such as Blockbuster and Redbox, Netflix’s innovation offers service via Internet, and it does not have any physical stores but instead delivers DVDs through postal mail in the U.S. Since then, Netflix has become the world’s leading internet television network with constant growth of customers to over 48 millions members in more than 40 countries in the North America, Europe, and the Latin America (Netflix, 2014). In this analysis, the main focus is examining the current market environment for Netflix. It identifies the type of market structure that Netflix is currently competing. The analysis also expands on the competitions, product differentiation, pricing strategy, and measuring the level of easy entry-and-exit.
Reed Hastings, co-founder of Netflix headquartered in Los Gatos, CA, began the company’s operations in 1997 after receiving an enormous late charge from a movie rental he returned long overdue. However, Hastings had the desire to be different than traditional movie outlets; whereas, customers had to drive to the location, pay a certain amount for each movie they rented, and were given a deadline in which to return the movie. Instead of using a method established by other video markets “to attract customers to a retail location, Netflix offered home delivery of DVDs through the mail” which eventually led to a booming business towards streaming forms of entertainment (Shih, Kaufman, & Spinola, 2009, p. 3). Today, Netflix exists along with several competitors; however, offers the most streaming content available for viewing, and continues to grow its subscriber base both domestically and globally. Although, direct and indirect competitors, acquisition costs, and several barriers present a financial threat for Netflix, the company has managed to grow with the acclamation of partnerships, expand to international territories, and vastly increase its price in shares of stock.
Company Q closed down two stores in higher - crime - rate neighborhoods claiming that these store were consistently losing money. Company Q further declined a request from the neighborhood food bank to donate day old goods, choosing to dump them instead. The company claimed that donating the goods would make them vulnerable to loss of revenue from possible fraud and theft from employees. Their claim of loss revenue is completely unfounded because no revenue is derived from dumping food. In both of these scenarios Company Q displays a callous disregard for the community that patronizes them. Even knowing that the job loss resulting caused by their withdrawal would further burden the economy of a community already in crisis, they persisted with their withdrawal. Furthermore their refusal to donate to the food bank using such flimsy and unfounded reasoning, demonstrates the company’s poor corporate citizenship.
In response to the idea of a corporate responsibility, not an individual’s, many argue that if the corporation is not a person, how can it be held to the same moral guidelines as an individual? After all, don’t people make the decisions, and those same people make up the corporations, and should therefore be held accountable. This theory does not exclude the possibility of upper management being held responsible; rather it includes it for the sake of the company’s survival.
Although the online streaming industry is continuously evolving, growth continues but slows down as the market demand approaches saturation, with less first-time buyers and mostly purchases for upgrades or replacements (Parnell, 2014). The market has been penetrated with current competitors offering the same type of service. Netflix can find ways to pull over customers from rivals with new technology and pricing which will grow their subscriptions but with their current offerings they have almost reached their peak. Netflix is in the middle of the product life cycle and can probably only expect to add another 36.5 million U.S. subscriptions until it reaches market saturation (Kim, 2014).
Over the years, many companies have decided to abandon ethical practices in lieu of higher profits. Because of the high value placed on profits in America, many companies have taken extreme measures to increase profits and increase payouts for shareholders. Arthur Andersen LLP is a prime example of how business executives have been willing to make unethical business decisions in order to please clients and gain an edge over competition. In the short run, these unethical decisions may have seemed beneficial, but in the long run, the extensive consequences of this behavior were not worth any anticipated gain. Arthur Andersen made many unethical business decisions in lieu of higher profits that had drastic consequences that extended fatherhood than any executive could have ever imagined.
Corporations the world over have been publicly criticized for improving their firm’s bottom line at any moral or social cost. Ethics essentially “refers to the issues of right, wrong, fairness and justice.” Clearly, examples such as Enron, WorldCom, and even Conrad Black tested society’s views on sound ethical business and the link to what society sees as “good” governance practices. Although the controversies involve issues matched in variety only by the types of companies, they all virtually involve some form of abuse of stakeholders trust. These cases are not representative of the entire spectrum of today’s business environment; in fact, there are a number of companies whose competitive advantages are based on “good” corporate governance practices – namely stakeholder involvement. As a result, I have chosen to present and explore in this essay the practices of one such company: the Toyota Motor Corporation while highlighting its “good” corporate governance principles.
The problem to be investigated is the ethical dilemmas faced by Board members that impact their ability to be effective leaders. This problem relates to the ethical issues raised in the Hewlett- Packard (HP) and Pretexting: Spying on the Board case study which was an examination of leaking Board sensitive information and the investigation of board members. As such this essay explores key factors relating to: (a) the drivers for the investigation and the tacit approval of this conduct; (b) issues of legal versus ethical conduct; (c) issues missed when analyzing the pretext decision and; (d) the governance strengths and weaknesses of the HP board.
With streaming services shaking up the industry and changing the way consumers get access to their favorite shows and movies, companies must continually seeks to outdo the others in order to gain more subscribers. The harsh competition among these streaming services forces each company to do whatever it can to make it to the top. Currently, the streaming giant Netflix dominates the industry, however the recently proposed acquisition of 21st Century Fox by Disney raises questions as to whether Hulu could become a major threat to Netflix’s success in the future. Although the proposed merger between Disney and 21st Century Fox will allow Disney to push Hulu forward in the streaming industry, Disney is not capable of accelerating Hulu to the point where it becomes a formidable threat to Netflix and pressures from the FTC call into question whether or not the merger will even pass.
The main purpose of composing this report is to determine whether Netflix should acquire Discovery Communications. This will be done by comparing Netflix to Discovery Communications using several factors including their financial summary, financial and strategic traits, internal forces, external forces, a SWOT analysis, and their key success factors. These combined elements will help Netflix determine if Discovery Communication is a good fit for Netflix as well as whether to acquire the organization. Discovery Communications is a global mass media company that has successfully built an empire in the non-fictional entertainment industry. Their cultural yet educative content, has built Discovery a customer base of over 3 billion subscribers, which is one of the largest customer bases in their industry alone ("Discovery Communications, Inc.", 2017).
This report investigates the current state of the changes undergoing in Netflix, and the management and competitor issues associated with the organisation. Netflix, established in 1997 by co-founder and CEO Reed Hastings, is an online media stream and DVD and Blu-Ray disc rental that allows viewers in parts of Europe, North America and South America, to watch their online content library including TV shoes and movies. So far, the company already has an estimate of 200,000 subscribers. Recently after a long wait, Netflix has confirmed that it will launch in Australia in March 2015. A concise history of the organisation and it's business activities and procedures are outlined.
We now all know what happened with blockbusters. Blockbuster went bаnkrupt in 2010 аnd Netflix is now a $28 billion dollar compаny, ten times what Blockbuster was worth. Blockbuster failure to innovate with the chаnging times аnd rise of the internet lead to their downfall. Should they have grasped the opportunity to move their services online (Taken Reed Hastings proposal) we would have talked about blockbusters instead of Netflix. By already having a reputation with their client base should they have moves their services online the customers would not have been unfamiliar with the name(brаnd), thus trusting in the name, allowing for аn easier trаnsition online.
It seems obvious that large corporations have a tendency to ignore the negative effects of their actions in favor of profit. This example, although sensationalized, still says to me that with power comes responsibility. It affirmed my belief that a corporation’s goal cannot be just to provide profit to shareholders, but there must also be an element of social responsibility.