AB 116 WEEK 6 DISCUSSION

AB 116 WEEK 6 Discussion Topic: Partnership Agreement Just like in any type of business organization, ethics in partnership is important because of the difficulties that two or more persons have in arriving at a common decision. Partners are under constant pressure to protect their investment. After reading the Ethics Case on pp. 604-605 of your text, discuss the following:
Who are the stakeholders in this situation? Identify the problems with Alexandra- actions and discuss the ethical considerations of her actions. How might the partnership agreement be revised to accommodate the differences in Alexandra- and Kellie- work and withdrawal habits?


BYP12-4 Alexandra and Kellie operate a beauty salon as partners who share profits and losses equally. The success of their business has exceeded their expectations; the salon is operating quite profitably. Kellie is anxious to maximize profits and schedules appointments from 8 a.m. to 6 p.m. daily, even sacrificing some lunch hours to accommodate regular customers. Alexandra schedules her appointments from 9 a.m. to 5 p.m. and takes long lunch hours. Alexandra regularly makes significantly larger withdrawals of cash than Kellie does, but, she says, “Kellie, you needn’t worry, I never make a withdrawal without you knowing about it, so it is properly recorded in my drawing account and charged against my capital at the end of the year.” Alexandra- withdrawals to date are double Kellie-.

Instructions

    (a) Who are the stakeholders in this situation?
    (b) Identify the problems with Alexandra- actions and discuss the ethical considerations of her actions.
    (c) How might the partnership agreement be revised to accommodate the differences in Alexandra- and Kellie- work and withdrawal habits?