Assessing the Goal of Sports Products, Inc.

Sports Products, Inc. is a key manufacturer of boating equipment and boating accessories. During the other(prenominal) nine months, Sports Products, Inc. has had stock prices decline almost $2 per sh be, in spite of a rise in lettuce. The concern of stockholders is that profits are important to management because gaind profits increase their income, since they are compensated on the basis of the political party?s profits, through a profit sharing plan. Stockholders only hit when the stock prices rise and do not directly make from increased profits. Sports Products, Inc. is also being sued for dumping pollutants in neighboring streams by state and federal environment officials because the company is not spending money for effective taint control. In this piece I will discuss Sports Products, Inc.?s over-riding goal, this pixilated?s agency problems, and evaluate the firm?s glide path to defilement control. I will also discuss the firm?s corporate governance structure and make specific recommendations to the firm.

Stockholders are concerned that they are losing money due to the declining value of the company?s shares. As stockholder?s, the only way they turn a profit is for the stock prices to rise. Under the current circumstances, stock prices are diminish while profits are increasing, which indicates that there is a mathematical agency problem.



The concern of management should be that of the stockholder?s, who avow and control the firm, the goal of management should be to pursue what is topper for the stockholders. Instead management seems to have decided to begin selfishly increasing their own paychecks by taking shortcuts on pollution control. After all, if done properly, effective pollution control would increase costs, decrease profits, and lower management?s pay.

Consequently, the lawsuit against the firm initiated by state and federal environmental officials is proof that the firms approach to pollution control is unethical. Incurring the expense...

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