During auditing there arise conflicts of interest since firms try to trace the financial statements that show how the management manages the tax company. The whole scenario may result to pressuring the auditors to sign for the cleared audits despite any issue that exist between the parties. Shareholder management conflict Shareholders are a vital entity to the business since their share contribution is what keeps the business running.
They keep on track how the business is performing since this determines the amount of dividend they will get at the ND of any trading year. However, conflicts of interest do arise since shareholders possess much influence over the company’s financial statements whereas the managers will produce forged statements to calm down the shareholders (Satanist & Satanist, 2014). Shareholders take much interest on the external auditors since they pay their salaries. Self-interest- professional standards conflict of interest Most organizations are seen to suffer due to the self-interests of the leaders.
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For interest, the management, and the auditors may violate their professional standards where they see they can benefit in the expense of the warehouses. Such violations of standards lead to the production of inaccurate financial statements in order to cover-up the damage. Again, auditors may violate their professional standards set by the organization for their own gain. How decisions made during the ethical cycle affect corporate culture? Decision-making is a very crucial process to any organization.
In an organization, decisions are made in accordance with the values and the ethics as per the corporate culture. Broadly, ethics is a way of guiding people in an organization on what is right or wrong. Ethical cycle determines how people n an organization are making moral decisions. Ethical cycle seeks to structure and improve moral decisions. Improving moral decision-making calls for a decision-maker to come up with a thorough and systematic analysis of the problem and justify the final decisions in an ethical manner.
Ultimately, decision-making steers towards finding an action, which is ethically acceptable. The decisions made during the ethical cycle affects the corporate culture in that they become the guiding principles for the employees (Satanist & Satanist, 2014). However, the ethical cycle becomes a hard task o agree on since people usually disagree on what to be termed as an ethical solution. Such differences may affect the corporate culture since some people will feel being sabotaged. Such disagreements may also lead people to behave unethically thus, the corporate culture becomes at risk.
The formulation of the moral problem as the very first step in the ethical cycle also becomes a problem. Problem formulation is an interactive process that requires more attention since the moral problem should be stated precisely as well as clearly. Leaders have a perception that they understand and are capable of defining the corporate culture. However, there may be a gap between how the management perceives the corporate culture and how the other employees feel (Cotter, 2008). Thus, leaders’ behaviors during ethical decision-making affect the corporate culture since other people tend to emulate them.
A sound decision-making process calls for cooperation in all steps of the cycle where the leaders unit to define the problem, diagnose, develop a solution, make an executive decision, implement it and lastly, evaluate the solution. Such a process shows that leaders are ethically upright and their final decision becomes ethical and upon its implementation and valuation, a strong corporate culture is developed. Decision-making steps in the ethical cycle from a global perspective Gathering facts is the initial step of making an ethical decision.
It is important to maintain neutrality when gathering information to avoid distorting facts. The accuracy of the information must be maintained to improve the attained decision. Predictions are made during the second step when information about the future is foreseen. It is important to ensure that all predictions are relevant and realistic. Making justifiable predictions improves the probability of attaining desired results. The third Step involves identification Of all the feelings, conscious and intuition.
Compassion tends to explain issues that cannot be understood by conscious and rational mind (Satanist & Satanist, 2014). The fourth step involves evaluating the possible outcome in different choices. It is important to evaluate the effect of the decision to the quality of life and other people’s reaction. Everyone should strive to make sound decisions that cannot bring shame. In the fifth step, one should have the information to explain all the reasons and have the will to engage everyone in the moral conversations (Cotter, 2008).
It involving testing the validity and measure its role towards solving the intended problem. Decisions that offer a solution to the challenging problems without creating other issues are considered effective and ethical. Such decisions tend to improve the moral knowledge and quality of life. Corporate culture Corporate culture refers to a system of shared assumptions, beliefs, values, and attitude. The factors determine workers attitudes towards the organization and people behaviors. At Wall-Mart stores, corporate culture determined people’s performance and behaviors such as dressing and acts.
It contributed to a unique psychological and social environment effects. Some of the factors supported by corporate culture included norms, vision, values, language, and symbols. It influenced the realization of success in various department and eventually supported achievement of the organization’s objectives and targets (Stay, 1999). Development of an effective corporate culture motivated workers in their respective position and promoted coordination. Everyone was willing to offer the best service to the organization and ensure that all the targets are met within the required period.
The process motivated workers and encouraged elimination of wastage and other issues that posed a risk to the organization (Solomon, Russell-Bennett & Privet, 2012). The atmosphere created favorable working conditions where workers were willing to solve all the challenging issues and consult when they felt that expected results have deviated. It is important to note that effective corporate culture tends to promote beneficial values such reliability tradition, public trust stewardship, public service, and quality services. It also promotes innovation and creativity among the workers through the formation of effective teamwork.
The process ensures that all the workers are willing to support each other to achieve the expected outcome.