Partnership Agreement

  1. Who are the stakeholders in this situation?

In this situation, the stakeholders of the beauty salon business are Alexandra and Kellie since they operate as partners and share profits and losses equally. However, from the case study, Alexander benefits more than Kellie.

  1. Identify the problems with Alexandra’s actions and discuss the ethical considerations of her actions.

First, Alexandra does not keep time and also she does not sacrifice time for the benefit of their company. She has allocated less time for her appointments than Kellie. Similarly, she takes long lunch hours instead of using part of it to operate the business. Second, she makes larger withdrawals of cash from the business than her partner Kellie. The problems with such actions are that it reduces the company’s profit. Also, the efficiency of the business might reduce. This will eventually result in the collapse of the business since it will be operating at a loss.

It is important for Alexandra to think of the business time. She should ethically avoid running personal errands that might derail her from carrying out business operations. Since the two stakeholders share profits and losses equally, they should make decisions together. Both Alexandra and Kellie should ethically make a decision on how they should manage their withdrawals. This will increase the efficiency of the business and ensure a fair operation.

  1. How might the partnership agreement be revised to accommodate the differences in Alexandra’s and Kellie’s work and withdrawal habits?

The two stakeholders should revise their partnership agreement to include a clause that allows both partners to receive equal amount of cash withdrawn. It is unethical for one person to withdraw more cash than the other. Also, the agreement should include the number of hours the two stakeholders should work in the business. Lastly, instead of them entertaining freedom to withdraw cash, their payment should depend on the number of hours worked.