Strayer University Business opportunity scenario

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The
responsibility of the directors of a corporation is to provide a return
to shareholders on their financial investment in the corporation . . .
in other words, shareholders expect to make money on their investment.
Corporations such as Facebook, Google, and Apple are financed through
the sale of billions and billions of dollars in shares purchased by
investors. Sometimes, however, the duty to maximize profits runs
contrary to legal, but still questionable, business opportunities.

Assume that you’re the director of one
of the corporations listed below and have been presented with the
business opportunity described in the scenario. Would you advise the
corporation to accept the opportunity? Make sure to fully explain your
answer, considering both the financial return expected and any related
ethical concerns.

  • ToyCo
    has just been informed that it’s wooden trains produced in China
    contain lead paint and can no longer be sold in the United States.
    However, a distributor offers to negotiate a deal with a foreign company
    to sell the trains in a South American country that has no laws
    addressing the presence of lead paint in children’s toys.
  • BabyHealth
    is seeing decreasing sales of its powdered infant formula in the United
    States due to more and more mothers choosing to breastfeed their
    babies. In an effort to offset these losses, BabyHealth chooses to sell
    their formula in third world countries. However, it is widely known
    that the water sources in these countries is often contaminated and not
    boiled prior to use.
  • After
    producing 10 million versions of its new smartphone, PhoneLand
    discovers that due to a manufacturing oversight, 5 of the phones may
    catch fire if left in a car on a hot day. While the worst case
    financial impact from the phones catching fire is 10 million dollars in
    damages, recalling and repairing the phones will bankrupt the company.