Ethics Flashcards
Corporate Stakeholders:
Affect or are affected by the achievement of the corporation’s objectives
Organizational Stakeholders
Customers Employees Social and political action groups Unions competitors Governments suppliers Communities shareholders
Stakeholders
People who have an interest, claim, or stake in an organization, in what it does, and in how well it performs
stakeholders and organizational effectiveness
Each group evaluates the effectiveness of the organization by judging how well it meets the group’s specific goals
Stakeholder Analysis – Primary stakeholder
Sufficient bargaining power to affect outcomes
Customers , Employees , Suppliers , Shareholders , Creditors
–Secondary stakeholder
Indirect stake but are affected by the corporation’s actions (Governments, NGO’s, Activists, Local communities, trade associations, Competitors)
–Stakeholder Input
Determine whether the input is necessary
Dr. Milton Friedman (1931-)
“THE BUSINESS OF BUSINESS IS BUSINESS”
“Business should not assume direct responsibility on both practical and theoretical grounds”
Dr. Milton Friedman (1931-)
“THE BUSINESS OF BUSINESS IS BUSINESS”
“Business should not assume direct responsibility on both practical and theoretical grounds”
“THE BUSINESS OF BUSINESS IS BUSINESS”
Acting from motives other than economic may, in the long run, harm the very society the firm is trying to help.
“THE BUSINESS OF BUSINESS IS BUSINESS”
By taking on the burden of these social costs, the business becomes less efficient – either price go up to pay for the increased costs or investment in new activities and research is postponed. The results negatively affect perhaps fatally – the long-term efficiency of a business.
Dr. Keith Davis
There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say engages in open and free competition without deception or fraud.
Porter & Kramer
“Social and economic goals are not inherently conflicting, but integrally connected.”
Broader responsibility
Private corporations have a responsibility to a society that extends beyond making a profit
DEGREES OF CORPORATE SOCIAL
RESPONSABILITY INVOLVEMENT
Social Obligation Approach: Meet only legal
obligations,
Social Responsibility Approach: Meet legal
obligations and current social obligations that
directly a–Economic
Social Responsiveness Approach: Meet legal
obligations and anticipated social obligations related to emerging trends/problems even if only indirectly affect business
