Details: For multinational corporations, friction costs arise where practices of the firm are seen by the public as exploitative or unethical. These actions lead to public criticism and loss in the value of the company's goodwill and may translate into measurable sales losses.
There is growing evidence that a corporation's image can become a competitive advantage due to positive gains in consumer approval. In the U.S., there are a number of indications that so-called "green consumers" represent an increasingly important niche in various sales markets, and companies that are environmentally exemplary and go beyond the minimum legal requirements can gain market advantages.
Empirical studies reveal a positive correlation between ethical conduct in a corporation and job satisfaction. The studies reported by the Novaris Foundation for Sustainable Development (http://www.foundation.novartis.com) indicate that structures within a corporation that transmit an ethical and cooperative commitment to employees boost motivation to work. For more study on business ethics and social responsibility, view some of the many links at Regent (http://www.regent.edu/general/library/subjects/business/ethics.cfm)
consider the interests of the stakeholders in the Acme Motors scenario
Acme Management and stockholders