Ethics Mid Term Answers

Classical Economics: The classical economic view is that business’ only goal is to maximize profits for owners. Business Not Equipped: Business is not equipped to handle social activities. Dilutes Business Purpose: It dilutes the primary purpose of business. Too Much Power Already: Businesses have too much power already . Global Competitiveness: It limits the ability to compete in a global marketplace. Arguments For CAR – Enlightened self-interest: Businesses must take actions to ensure long-term viability. Warding off government regulations.

Business would prefer to self- jugulate than have governments regulate. Resources Available: Business has the resources and expertise. Protraction is better than Reaction. Protraction is also less costly both financially and reputations. Public supports: The public strongly supports-?and expects-?CAR. NAS 3 Corporate Citizenship definition Embraces all the facets of corporate social responsibility, responsiveness, and performance. Benefits of Corporate Citizenship: Improved employee relations (improves recruitment, retention, morale, loyalty, etc. Improved customer relationships (increases customer loyalty; a breaker) Improved business performance (positively impacts bottom-line returns, increases competitive advantage) Enhanced marketing efforts ( helps create a positive company image) NAS 4 triple bottom line- A variant of the “multiple bottom line” perspective is popularly known as the “triple bottom line” concept. The phrase triple bottom line has been attributed to John Lexington. The concept seeks to encapsulate for business the three key spheres of sustainability-?economic, social, and environmental.

Economical- refers to the firm’s creation of material wealth, including financial income and assets. Social- bottom line is about the quality of people’s lives and about equity between people, communities, and nations. Environmental- is about protection and conservation of the natural environment. 5. Three views of firm Production view: owners thought of stakeholders as individuals or groups that supplied resource or bought goods or services. Managerial view: it refers to internal and external changes in a business where the manager has to be prepare to carry with these changes.

Stakeholder view: it is the result of the adaptation of changes in a business. An example of company that using the here views of firm will be Walter because it is part of their business to keep their operation to offer the products to their customers, at the same they are prepare to adapt for any change but they always make renovations in their process to give excellent services to their customers. NAS 6:- Stake Holders:- A stakeholder is an individual or a group that has one or more of the various kinds of stakes in the organization.

Just as stakeholders may be affected by the actions, decisions, policies, or practices of the business firm, these stakeholders also may affect the organization’s actions, decisions, policies, or raciest. Primary Stake holders:- People directly benefiting from or affected by a particular business activity, such as the distribution of a product or a change to a service agreement. Primary stakeholders may include customers, employees, stockholders, creditors, suppliers, or anyone else with a functional or financial interest in the product or situation.

Also called market stakeholder. Secondary Stakeholders:- Secondary stakeholders: people or groups who have a role in the decision- making process without being directly affected by the outcome. These are usually intermediaries in the aid delivery process. These can be funding organizations, implementing agencies, executing agencies, Nags, etc. These stake holders are very important to the company:- It helps in decision making of the company. It allows them to make strategies and create products according to the demands of the customers.

It helps the organizations to generate finding’s in order to keep the organization growing. NAS 7 Four stakeholder types a firm needs to consider are:- 1) The supportive Stake holder:- The supportive stakeholder is high on potential for cooperation and low on potential for threat. This is the ideal takeover. To a well-managed organization, supportive stakeholders might include its board of directors, managers, employees and loyal customers. Others might be suppliers and service providers. 2) The Marginal Stakeholders:- The marginal stakeholder is low on both potential for threat and potential for cooperation.

For large organizations, these stakeholders might include professional associations of employees, consumer interest groups, or stockholders-?especially those that are not organized. The strategy here is for the organization to monitor the marginal stakeholder. Monitoring is especially called for to make sure circumstances do not change. Careful monitoring could avert later problems. 3) The Non-supportive Stake holders:- The nonsupport stakeholder is high on potential for threat but low on potential for cooperation. Examples of this group could include competing organizations, unions, federal or other levels of government, and the media.

Special-interest groups often fall in this category. The recommended strategy here is to defend against the non- supportive stakeholder, PETA typically comes across as a non-supportive stakeholder because of its high potential for threat. ) The Mixed Blessing Stake holders:- The mixed-blessing stakeholder is high on both potential for threat and potential for cooperation. Examples of this group, in a well-manage organization, might Include employees who are in short supply, clients, or customers. A mixed blessing stakeholder could become a supportive or a nonsupport stakeholder.

A summary statement regarding these four stakeholder types might be stated in the following ways: Managers should attempt to satisfy minimally the needs of marginal stakeholders and to satisfy maximally the needs of supportive and mixed leasing stakeholders, enhancing the latter’s support for the organization. NAS 8 1. Who are our stakeholders? 2. What are our stakeholders’ stakes? 3. What opportunities and challenges do our stakeholders present to the firm? 4 What responsibilities (economic, legal, ethical, and philanthropic) does the firm have to its stakeholders? 5.

What strategies or actions should the firm take to best address stakeholder challenges and opportunities? By knowing the answer of these key questions, companies are prepared to face any circumstance that involve their stakeholders upon each role, power f influence, interest and responsibility, which lead to organizations to have the confidence to deal in a proper, effective and safety way the issues that any operation may incur. NAS 9 Responsibilities here may be thought of in terms of the corporate social responsibility, economic, legal, ethical, and philanthropic responsibilities NAS 10.

Describe the questions management should considering taking stakeholder action. (book) Do we deal directly or indirectly with stakeholders? Do we take the offense or the defense in dealing with stakeholders? Do we accommodate, negotiate, manipulate or resist stakeholder overtures? Do we employ a combination of the above strategies or pursue a singular course of action? NAS 11 What is stakeholder thinking and how is it facilitated? (slides) Stakeholder thinking- The process of always reasoning in stakeholder terms throughout the management process.

It Increases the complexity Of decision-making but most consistent with today’s business environment. It Is facilitated by Stakeholder culture: Stakeholder culture embraces the beliefs, values, and practices that organizations have developed for addressing stakeholder issues and relationships. Stakeholder management capability (SCM): rational level (who the stake holders are), process level (scan the environment around receive relevant info about them), and transactional level (managers engage in making relationships with them).

Stakeholder corporation model: stakeholder corporation would embrace the idea of “stakeholder symbiosis. ” Stakeholder symbiosis is an idea that recognizes that all stakeholders depend on each other for their success and financial well-being. 67 Executives who have a problem with this concept would probably also have trouble becoming part of stakeholder corporations. Principles of stakeholder management: acknowledge, monitor, listen, communicate, adopt, recognize, work, avoid, acknowledge conflicts.

NAS 12 Corporate governance refers to the method by which a firm is being governed, directed, administered, or controlled and to the goals for which it is being governed. Corporate governance is concerned with the relative roles, rights, and accountability of such stakeholder groups as owners, boards of directors, managers, employees, and others who assert they are stakeholders. To appreciate fully the legitimacy and corporate governance issues, it is important that we understand the major groups that make up the corporate form of business organization.