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Considering the Interests of Various Stakeholders

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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.novartisfoundation.org/) 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)

The group portion of your assignment is to hold a discussion as follows. As a group, consider the interests of the stakeholders in the Acme Motors scenario.

- Acme Management and stockholders
- Maquilodora workers
- Consumers
- Mexican government

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This solution is comprised of a 530 word response which discusses the interests of the various stakeholders raised in this Acme motors scenario.

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Interests of the various stakeholders in the acme motors scenario:

Acme Management and stockholders: The management and stakeholders of the company are directly affected by this situation at Acme Motors. It is not only depleting the productivity and profits of the company, but also giving a big blow to its image. As management and stakeholders of the company, it is their utmost concern to keep their employees happy and satisfied and provide them the best working conditions. This will not only improve employee's morale and productivity, but will also ensure their life long commitment towards the company. From an ethical point of view also, if such inhuman policies will continue at the organization, the day is not far from when the company will have to shut down its operations in Mexico. In order to rectify this problem, management has to take ...

Solution provided by:
Sheetal Jain, PGDM
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  • BComm, University of Delhi
  • Post Graduate Diploma in Management (Equivalent to MBA), All India Management Association
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