Answer:
(1)The primary stakeholders in this example are the shareholders of he company who have infused their money expecting it to be used for lawful objects as stated in the charter of the company, the secondary stakeholders can be the environment such as humans.
(2)President actions does not seem ethical, because he wants to save his own job at the expense of polluting the environment what can cause harm to humans, plants and animals.
(3) Since Finlay Inc. has no assets other than $ 10 in patent, it would be very hard to carry the huge losses should lawsuits be filed. In that event, there are going to be huge outflows of cash from the books of Piqua, and the stockholders would want to know why or the reason.
Explanation:
Solution
Given that:
(1)The primary stakeholders in this case, are the shareholders of the company, who have infused their money expecting it to be used for lawful objects as stated in the charter of the company. The secondary stakeholder could be the environment comprising of the fauna,flora, and humans, as the spray can be a serious pollutant in the environment.
(2) The president's actions and reasons are does not seem ethical
Firstly, he wants to save his own job at the expense of polluting the environment, and possibly causing various harm to animals,plants, and even humans.
Secondly, he does not want to share the contingent liabilities that may occur with the stockholders, that may lead to erosion in shareholder value.
The third reason is,in order to keep these liabilities off the balance sheet of Piqua Chemical Corp., he has developed a SPV for carrying the losses from lawsuits.
Hence, there is no limpidity here, and he has committed a breach of trust. The president of the company, as the agent of the company and its stockholders stands in a relationship that is fiduciary, and should avoid conflict or issues of interest at all cost.
(3) At the end, it would be hard for Piqua to hide itself from the losses of Finlay Inc.
Since Finlay Inc. has no assets other than $ 10 in patent, how would it be possible to carry the huge losses should lawsuits be applied. In that case, there are going to be huge outflows of cash from the books of Piqua, and the stockholders would want to know the what caused it.
