Ch5 Notes Stakeholder investors employees customers suppliers and the wider community an expansive term that includes a business entity s owners o Primary generally those who will feel a direct impact based on the decision ex investors owners employees o Secondary those w o any direct connection to the business but may suffer some adverse consequences in an indirect way ex local residents businesses o Key stakeholders who can significantly influence a project ex Morals manager term referring to generally accepted standards of right and wrong Ethics term used to describe having a conscious system in use for deciding in a given society moral dilemmas sound if it produces positive results for the most people o Consequences based approach moral philosophy Utilitarian model of moral philosophy stating that an action is ethically Values management and ensuring behaviors are aligned with those values the prioritizing of moral values for an organization o Challenges challenges based on general confusion about the notion of ethics others from narrow or simplistic views of ethical dilemmas o Advantages help align employee behaviors w the top priority ethical values preferred by top level management cultivation of strong teamwork productivity give employees context for executing business operations clarity in business operations allows a business organization to portray a strong positive image to the public strong public image sensitizes leaders staff to how they want to act in a consistent manner staying the ethical course in turbulent times Energy bank business model adopted by Enron Corporation in which they purchased energy from one source at a discount rate and sold it to markets where demand was greatest for energy following deregulation of the energy markets Similarities differences btwn Should be developed in cooperation w the HR manager legal counsel Code of conduct specify actions in the workplace Trustworthiness honesty integrity promise keeping loyalty Respect autonomy privacy dignity courtesy tolerance acceptance Responsibility accountability pursuit of excellence Caring compassion consideration giving sharing kindness Justice fairness procedural fairness impartiality consistency equity equality due process Civic virtue citizenship law abiding community service protection of the environment Effective code of conduct contains examples of appropriate behavior ex preferred styles of dress avoiding illegal drugs following instructions of superiors being reliable prompt maintaining confidentiality not accepting personal gifts from 3rd parties etc Code of ethics general guides to decisions about those actions Review any values needed to adhere to relevant laws regulations Review which values produce the top 3 or 4 traits of a highly ethical successful product or service in each area Identify values needed to address current issues in your workplace Consider any top ethical values that might be important to primary secondary stakeholders Moral philosophies Principles based approach of established principles or standards such as religious tenets or codes employ a principles based approach ethical decisions that are made according to a set o These religious based principles are the source of individual decision making not subject to exceptions but are tempered by other religious principles such as mercy justice o Some philosophers ethicists use the notion that humans have o Immanuel Kant certain inherent moral rights that spring from their ability to reason choose freely what they do w their lives duty based ethics essay Critique of Practical Reason based on an inherent notion that humans act in accordance w from a sense of duty to human dignity Theorized that rights imply duties the duty to respect other s rights was paramount in acting morally Categorical imperatives universalization test central theme in Kant s work centered on the belief that ethical dilemmas must be resolved through a categorical imperative test whereby individuals make ethical decisions w an eye toward the potential consequences if everyone in society acted the same way Consequences Based Approach the ethical course of action is the one that provides the most good happiness for the greatest number of people and has the least harmful consequences for the majority of the community o Stems from the utilitarian stream of moral philosophy method for evaluating ethical dilemmas o An action is ethically sound if it produces positive results for the most people o The course of action that results in the most benefits for the most individuals is the most ethical o If the action impacts the majority of community members in a negative way it is inherently unethical Theories of corporate responsibility CSR involves a broader based identification of important business social issues a critique of business organizations practices o Conscience resides not just in individuals but also in a corporation Businesses committed to CSR aim to achieve commercial success in ways that honor ethical values respect people communities the natural environment in a sustainable manner while recognizing the interests of its stakeholders Corporate citizenship the adoption by a business of a strategic focus for fulfilling the economic legal ethical philanthropic social responsibilities expected of it by its stakeholders 3 schools of thought o The Narrow View Invisible Hand Adam Smith a deliberate amorality in corporate decision making is encouraged in the name of a new morality the common good is best served when each of use our economic institutions pursue not the common good or moral purpose but rather society is best served when we pursue a competitive advantage Competitive advantage is best for society The market s efficiencies provide an invisible hand that guides morality responsibility Milton Friedman the only responsibility a business has is to maximize shareholder wealth managers who pursue social initiatives w corporate funds are violating their fiduciary duties to the owners of the corporation managers are responsible solely to the shareholders to make as much profit as legally possible o The Moderate View Government s Hand corporations have the responsibility to pursue objectives that are rational legal and purely economic The government provides the exclusive view of corporate responsibility Government is seen as the most valuable source of setting guidelines because it represents the moral views of the general public Government