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Transcript of Business Stakeholders
This was often against interests of groups outside organisation
Now, interdependence seen as vital
Partnerships with all interest groups
Benefits firms can expect from stakeholder management
Better public relations
More favourable reporting of firm’s activities in media
Quality relationships with suppliers
Lower staff turnover
Higher employee motivation
Reduced impact of pressure groups on firm’s activities
But only if firm genuinely commits to stakeholder model.
The Stakeholder Model of Business
Ethical questions in business relate to:
Behaviour towards customers, suppliers, distributors, and competitors
The way employees are treated
The treatment of other stakeholder groups
The effect on the natural environment
Conduct in international operations
Ethics and Corporate Social Responsibility
Who are Stakeholders?
Any individual or a collection of individuals with an interest in an organisation
Two main types:
1. Internal: Employees
2. External: Government
have different levels of interests
have varying degrees of power
can be be in conflict with each other
Three key points
Traditional Owners/shareholder Approach
The traditional approach
Business (management) acts in best interest of shareholders / owners only
Principal aim is to maximise shareholder returns
Business takes much more account of wider stakeholder interests
Approach based on consultation, agreement, cooperation
E.g. social and environmental concerns become more important
Ethics and Corporate Social Responsibility (CSR)
CSR are standards of conduct that an organization sets itself in dealing with both the internal and external environment
Ethics in Business
What do we mean by Ethics?
Ethics can be defined as a conception of right and wrong conduct
Ethics tells us when our actions are ‘moral’ or ‘immoral’
Ethics are supposed to govern actions and behaviour
“is the study of how personal moral norms apply to the activities and goals of a commercial enterprise”.
Laura Nash 1994, Why business ethics now?
'The single, most important objective for a business organisation is profit maximisation. This is the bottom line and the only realistic criterion by which organisational effectiveness can be judged'
Should this view being challenged?
Should we judge business organizations only by profit?
What should be the other important objectives?
BUT: At the heart of Capitalism is the profit motive and this means that stakeholder interests may always be of secondary or minor concern?
TWO APPROACHES TO VIEWS ON THE ROLE OF BUSINESS IN SOCIETY
Main focus is on growth & profit
Why? What pressures are causing this change
adapted from Worthington, The External Business Environment 2012
What is the role of business in society?
Towards a more 'moral' form of capitalism
"the process by which managers within an organisation think about and discuss their relationship with stakeholders as well as their roles in relation to the