Identify the problems with elizabeths actions

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Elizabeth and Laurie 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. Laurie 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. Elizabeth schedules her appointments from 9 a.m. to 5 p.m. and takes long lunch hours. Elizabeth regularly makes significantly larger withdrawals of cash than Laurie does, but, she says, "Laurie, 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." Elizabeth's withdrawals to date are double Laurie's.

Instructions

(a) Who are the stakeholders in this situation?

(b) Identify the problems with Elizabeth's actions and discuss the ethical considerations of her actions.

(c) How might the partnership agreement be revised to accommodate the differences in Elizabeth's and Laurie's work and withdrawal habits ? 

Reference no: EM131131939

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