Ethics & stakeholders
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This document discusses stakeholders and business ethics. It identifies key stakeholders as stockholders, managers, employees, suppliers, distributors, customers, local communities, and governments. It notes tensions between profits and higher wages, production and pollution, and supplier benefits versus consumer prices. The document also discusses business impacts on the environment like waste, energy use, pollution, and externalities - both positive impacts like new infrastructure and negative impacts like pollution.
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Ethics & stakeholders
- 1. Ethics & Stakeholders Amali N Ediriweera Dept. of HRM FCMS- UoK
- 2. Stakeholders The people and groups that supply a company with its productive resources and have a claim on its resources.
- 3. Stakeholders
- 4. Stockholders Want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation Want to maximize their return on investment
- 5. Managers Responsible for using a company’s financial capital and human resources to increase its performance Have the right to expect a good return or reward by investing their human capital to improve a company’s performance Frequently juggle multiple interests
- 6. Employees Companies can act ethically toward employees by creating an occupational structure that fairly and equitably rewards employees for their contributions health and safety at work, security, fair pay
- 7. Suppliers and Distributors Suppliers expect to be paid fairly and promptly for their inputs Distributors expect to receive quality products at agreed-upon prices
- 8. Customers Most critical stakeholder Company must work to increase efficiency and effectiveness in order to create loyal customers and attract new ones
- 9. Local Community – provide employment, safe working environment, minimise pollution and negative externalities – provide external benefits? Government – abide by the law, pay taxes, abide by regulations Environment – limit pollution, jamming, development, etc.
- 10. Business Ethics Tensions: Profits versus higher wages Production versus pollution Supplier benefits versus consumer prices/lower costs Survival of the business versus needs of stakeholders
- 11. Environment Waste – land-fill? re-cycling? burning? Energy use – renewable energy, non-renewable resources Global Warming – fact or fiction? Pollution: Noise Air Land Sea Water
- 12. Externalities Impact on a third party of a business decision Those affected not involved in the decision Negative externalities – negative effects of business activity – pollution, urban development, etc
- 13. Externalities Positive Externalities: Benefits to third parties of business activity e.g. new infrastructure as a result of development, side effects of research and development, technology (the Internet?), convenience, improved standards of living Out of town shopping centres – greater ease of access, everything in one place, pleasant environment to shop in, etc.
- 14. Externalities Government policies – encourage business activity that leads to positive externalities and discourage those that lead to negative externalities