Ch5 Notes- Stakeholder —an expansive term that includes a business entity’s owners, investors, employees, customers, suppliers, and the wider communityo 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 maysuffer some adverse consequences in an indirect way (ex: local residents & businesses) o Key—stakeholders who can significantly influence a project (ex: manager)- Morals —term referring to generally accepted standards of right and wrong in a given society- Ethics —term used to describe having a conscious system in use for deciding moral dilemmas- Utilitarian —model of moral philosophy stating that an action is ethically sound if it produces positive results for the most peopleo Consequences-based approach (moral philosophy)- Values management —the prioritizing of moral values for an organization and ensuring behaviors are aligned with those valueso 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 ethicalvalues preferred by top-level management (cultivation of strong teamwork & productivity); give employees context for executing business operations (clarity in business operations); allows a businessorganization 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 marketsSimilarities & differences btwn:- Should be developed in cooperation w/ the HR manager & legal counselCode 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 stakeholdersMoral philosophies- Principles-based approach : ethical decisions that are made according to a set of established principles or standards such as religious tenets or codes employ a principles-based approacho 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 & justiceo Some philosophers & ethicists use the notion that humans have certain inherent moral rights that spring from their ability to reason &choose freely what they do w/ their liveso Immanuel Kant —duty-based ethics; essay Critique of Practical Reason;based on an inherent notion that humans act in accordance w/ & froma 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 inKant’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 communityo 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 peopleo The course of action that results in the most benefits for the most individuals is the most ethicalo 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 & practiceso Conscience resides not just in individuals but also in a corporation- Businesses committed to CSR aim to achieve commercial success in ways thathonor 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 anew 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 competitiveadvantage 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