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Sports Products

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Assessing the Goal of Sports Products, Inc. Lance Langdon University of Phoenix FIN/419 J. Jesse Conques, Facilitator March 15, 2009
Sports Products Inc. is an important manufacturer of boating gear and accessories. The textbook case under consideration centers on the clerical assistant - Loren Seguara employed by the company’s accounting department. Another personality in the case is Mr. Dale Johnson employed in the company’s shipping department in the position of packager. The dilemma in the case concerns the complaints of Dale and Loren’s discussion during their lunch break concerning profits and stock dividends. Dale grumbled that even though he was working hard to keep overhead costs down in his department; he did not feel the company was recognizing his efforts. While performing his duties Dale feels he is putting his best efforts toward his perception of cost control by not wasting packing supplies and as well as using company property in an efficient and in a cost-effective manner. However, even though Dale feels he is carrying out his work with full efficiency as is his group of co workers in his department, the result is a downturn in the company stock price by almost $2 a share over the last nine months.
What should the management of Sports Products, Inc. pursue as its overriding goal? Why?

The overriding objective of the company management of Sports Products needs to focus on how to maximize the assets of the shareholders in the business. The corporate objective task of making the most of shareholder wealth presupposes that company management work in the best interests of stockholders and not just their own individual goals and not to try to seize wealth from lenders to benefit company stockholders. Stockholder wealth maximization also presumes that company managers do not take measures to mislead...

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