Business Ethics and Stakeholder Theory
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1. Describe what you consider to be the responsibility of top leadership in a large organization with respect to reaching a balance between profits and stakeholder concerns. Please support your position by giving some examples from the text or from other sources where CEOs did a good or poor job of finding this balance.
2. Terris discusses the history of business ethics in America since the late 1800s with respect to anti-competitive practices, seeking unfair advantage through immoral arrangements with suppliers and public officials, failing to adhere to laws and regulations, and lack of transparency. Discuss to what extent you believe things to be better or worse in the present day for businesses in general.
3. Describe welfare capitalism and its role as a forerunner of the contemporary business ethics movement.
For Question 4 below here is the scenario:
A public corporation of 980 employees manufactures a popular brand of garments (mostly jeans) that are primarily made and sold in America nation-wide. It has a large contingent of employees in several small rural communities in the Eastern US and is the primary employer in all of those communities. Two if its 5 shops are unionized but the union and management have a good working relationship. The company has traditionally marketed its clothing line as "Made in the USA" and attracted a bit of a "cult like" following as a result, but an outside consulting firm has suggested that significantly greater profits are possible if a different strategy is employed. The corporation is subsequently considering whether to off-shore its manufacturing facilities to a poor nation to save money on labor. It would also discretely discontinue its "Made in the USA" marketing ads and hopefully ride the wave of its previous marketing campaigns for a while. It is estimated that total cost per unit of production will be decreased by one third which equates to tens of millions of dollars.
4. Provide a paragraph summarizing the concept of stakeholder management based on above scenario.
5. How do you think the following stakeholder groups in the above scenario will be impacted?
• Employees/unions
• Communities
• Stockholders
6. What would you recommend the employer described above should do?
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Solution Summary
The answer to this problem explains stakeholder management and ethics in business. The references related to the answer are also included.
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Step 1
It is the responsibility of the top leadership in a large organization with respect to reaching a balance between profits and stakeholder concerns. He must temper the need to earn profits with the concerns of the government by paying taxes. employees by paying reasonable rates of salary/compensation, customer by providing value for money, suppliers by paying them reasonable prices for their raw materials, creditors by paying them their installments on time, and the community by creating new jobs/protecting the environment. An example of a situation where the CEO did a poor job of maintaining a balance between profits and stakeholder concerns is Wal-Mart where there was litigation alleging that women are paid less than their male counterparts for essentially the same jobs. The balance between profits and interests of employees was not maintained. One company that has maintained a balance between profits and stakeholder interests is Google Inc. its generous policy towards employees has helped it attract the best talent from all over the world.
Step 2
Things are better in the present day for all businesses. Anti-competitive laws are in place in the USA. In addition, the Department of Justice takes serious cognizance of complaints related ...
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