Businesses that operate in the present-day competitive market may not record optimal performance if they disregard the prevailing regulatory standards. Such guiding principles have been put in place to inform companies’ economic decision-making processes. Contravening the laid-down ethical, accounting, monetary, and government policies may subject organizations to significant penalties, hence reducing their expected profitability levels. This paper examines the above elements with a focus on Amazon, which is a globally recognized business located in Seattle, Washington, offering technology, e-commerce, artificial intelligence, and cloud-computing services.
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Regulatory considerations help Amazon to implement economic decisions that facilitate its productivity in the marketplace not only in the U.S. but also around the world. The organization is also aware of penalties associated with improper transportation of its products and the mistreatment of workers. For example, regarding remuneration, Amazon has to abide by the stipulated hourly rate of approximately $15.24 per employee (Murninghan, 2018). Overall, regulatory considerations influence Amazon’s level of operations in various countries depending on the existing federal, local, and government policies.
Although Amazon’s business is online-based, the company is required to put in place practices that boost EPA’s recommended environmental regulations (Dillon et al., 2018). For instance, Greenpeace, an organization that monitors companies’ levels of adopting renewable energy, sustainable commodities and services, and non-poisonous materials, accused Amazon of violating environmental regulations (Dillon et al., 2018). Specifically, it blamed the technology business for failing to embrace transparency regarding its green practices. According to Dillon et al. (2018), Amazon’s move to supply harmful pesticides breached EPA’s environmental requirements, hence resulting in a $1.2 million fine.
According to the Dodd-Frank Act, employees have the right to report to the Securities Exchange Commission (SEC) in case any wrongdoing is noted in the company (Elzweig, Davidson, & Chambers, 2018). Amazon is expected to operate in a manner that guarantees sanity in its financial records in line with the Dodd-Frank Act. As Elzweig et al. (2018) assert, Amazon embraces the provision that requires any employee exposed to unwarranted termination or intimidation to seek legal services. The company also adheres to the Sarbanes-Oxley policy, which allows workers to inform the appropriate federal agency about malpractices observed in the organization.
The Extent of Impact on the Company
Regulatory issues have significantly affected Amazon’s operations. For instance, the company has been forced to ensure that it utilizes non-toxic materials while at the same time keeping customers’ details confidential (Murninghan, 2018). Observing the Sarbanes-Oxley Act and the Dodd-Frank policy has contributed to ensuring that economic crises similar to what was experienced in the period of 2007 and 2008 do not recur.
Ethical guidelines influence companies’ financial decisions. Amazon has invested heavily in mechanisms for ensuring that unintended third parties do not access its customers’ details for malicious reasons. Ethical considerations have also helped the company to allocate financial resources aimed at boosting creativity and innovation, as opposed to utilizing other organizations’ ideas against the stipulated IP requirements.
Some of the ethical issues that Amazon has to consider include concealing clients’ confidential information and upholding intellectual property (IP) rights. Other ethical elements entail offering fair wages, giving employees long-term contracts, and allowing expectant women to take a break regardless of whether they have achieved the set targets or not. According to Elzweig et al., (2018), the company is expected to implement policies, which ensure that no worker is fired or subjected to any form of mistreatment for exposing fraudulent deals, including the misrepresentation of financial statements.
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The Impact of Amazon’s Ethical Issues
Amazon is among the most compliant companies globally. As a result, it has consistently remained profitable due to the limited fines associated with violations of the existing ethical guidelines. For instance, as Murninghan (2018) reveals, part of its economic decisions include ensuring that workers get the recommended $15.24 per hour.
Fiscal and Monetary Policies
Fiscal and monetary considerations play a huge role in informing the company’s idea of encouraging American central and state governments to execute policies that guarantee fair tariffs on online sales. According to Da, Warachka, and Yun (2018), such policies ensure that Amazon contributes to the U.S. economic development targets through the revenue collected from its products in the form of taxes.
The Effect of Fiscal and Monetary Policies on Amazon
Whenever the U.S. wishes to fund its projects, it has the power to increase taxes imposed on products. It can also influence the amount of money supplied to businesses. For Amazon, such policies determine the prices to be set on various products. However, according to Da et al. (2018), they may also result in reduced stock returns, and consequently, low profitability levels, especially when customers are unable to cope with the new prices.
Higher and Lower Tax Rates
Higher tax rates can lower Amazon’s expenditure levels because of the associated reduced returns. Hence, its economic decisions will primarily be geared towards ensuring that customers continue being loyal to the company’s products, despite the high prices. In case of low tax rates, Amazon expects improved purchases due to the prevailing reduced product prices (Da et al., 2018). Overall, productivity levels increase to the extent that the company can allocate part of the income gained to other development agendas such as CSR projects.
Amazon’s business is required to comply with various ethical, environmental, and accounting regulations, including the Dodd-Frank Act and the Sarbanes-Oxley policy. In case of any violation, the underlying court charges may interfere with the company’s global image and, consequently, its profitability levels. In line with EPA’s guidelines, Amazon is required to reveal information concerning its energy consumption, the raw materials it uses, and the amount of harmful chemicals utilized in the production process.
Da, Z., Warachka, M., & Yun, H. (2018). Fiscal policy, consumption risk, and stock returns: Evidence from U.S. states. Journal of Financial & Quantitative Analysis, 53(1), 109-136. Web.
Dillon, L., Sellers, C., Underhill, V., Shapiro, N., Ohayon, J. L., Sullivan, M., …Wylie, S. (2018). The environmental protection agency in the early Trump administration: Prelude to regulatory capture. American Journal of Public Health, 108(2), 89-94. Web.
Elzweig, B., Davidson, B., & Chambers, V. (2018). Disparities between Dodd-Frank and Sarbanes-Oxley whistleblower statutes can greatly impact claims. Banking & Financial Services Policy Report, 37(11), 4-10.
Murninghan, M. (2018). Equity culture and decent work: The case of Amazon. New England Journal of Public Policy, 30(1), 1-15.