Bussiness Ethics Responsibility of Stakeholders by phamtienhuong


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									Business Ethics: An overview of
responsibility of Stakeholders

                Presented by
                 Gaurav Garg
                 MBA-II(A), 2645
What is Ethics…..

  • Ethics is a set of values and rules which
    define the right and wrong conduct.

  • Ethics means norms, morals and ideals
    prevailing in a society.
Principles of Ethics

•   Honesty
•   Respect
•   Responsibility
•   Fairness
•   Care
    6 Primary sources of Ethics

•   Genetic inheritance
•   Religion
•   Philosophical systems
•   Codes of conduct
•   Legal system
•   Cultural experience
  Business Ethics
Business + Ethics = Business Ethics
• Business commonly referred to a commercial
  activity aimed at profit motive.
• Business ethics refers to moral principles and rules
  of conduct which are applied to business.
• Business Ethics means conducting all aspects of
  business and dealing with all stakeholders in an
  ethical manner…
Some Unethical Practices

Related to:
• Consumers
• Government
• Community
• Employees
• Economy
 Unethical behavior occurs for
 many reasons which include :

• Lapses in individual ethics
• Ruthless pursuit of self-interest
• Outside pressure
• Structure vary from country to
• Standardized on American
• Globalized Capitalism…
  Self Governance
• Substituting Governmental
  regulation of market

 • Ensure that managers effectively execute
   the strategy laid down
   by the B.O.D’s

 • Avoid fraud, deception, malpractices
   within the corporation.

 • Provide opportunities to share holders to
   examine the functioning and true
   performance of the corporation
Principles of Corporate Governance

  • Fairness.

  • Accountability

  • Responsibility

  • Transparency.
Organizational Stakeholders

• A corporate stakeholder is a party who
  affects, or can be affected by, the company's
  actions .
• To be effective, an organization must at least
   minimally satisfy the interests of all the
  groups that have a stake in the organization.
Stakeholders of the Organization


             Owners                Employees

        Unions                            Suppliers

        Government                    Community

                 Strategic   Society in
                 partners     General
Types of stakeholders
Responsibilities & Characteristics of

1. Owners and Shareholders

•   The number of owners and the roles they carry out
    differ according to the size of the firm
•   In small businesses there may be only one owner
    (sole trader) or perhaps a small number of partners
•   In large firms there are often thousands
    of shareholders, who each own a small part
    of the business
2. Managers

•   Organize
•   Make decisions
•   Plan
•   Control
•   They are accountable to the owner(s)
3. Employees:

• A business needs staff or employees
  to carry out its activities
• Employees agree to work a certain number
  of hours in return for a wage or salary
• Pay levels vary with skills, qualifications,
  age, location, types of work and industry
  and other factors
4. Customers:

• Customers buy the goods or services
  produced by firms
• They may be individuals or other businesses
• Firms must understand and meet the needs
  of their customers, otherwise they will fail
  to make a profit or, indeed, survive
5. Suppliers:

• Firms get the resources they need to
  produce goods and services from suppliers
• Businesses should have effective
  relationships with their suppliers in order to
  get quality resources at reasonable prices
• This is a two-way process, as suppliers
  depend on the firms they supply
6. Community:

• Firms and the communities they exist in
  are also in a two-way relationship
• The local community may often provide
  many of the firm’s staff and customers
• The business often supplies goods
  and services vital to the local area
7. Government:

• Economic policies affect firms’ costs
  (through taxation and interest rates)
• Legislation regulates what business can do
  in areas such as the environment
  and occupational safety and health
• Successful firms are good for governments
  as they create wealth and employment

   • Maximize stake holder value. Develop
     ethical responsible behavior of managers.
   • Managerial decisions should also reflect
     ethical responsibilities- distribution of benefit
     and allocations of costs in a manner that is
     considered right, just by the stake holders..
Stakeholders’ Concerns
Stakeholder Group              Examples of Concerns
   Owners and Investors      Financial Soundness
                              Consistency in meeting shareholder
                              Sustained profitability
                              Timely and accurate disclosure of
                               financial information
Stakeholders’ Concerns (cont.)
Stakeholder Group   Examples of Concerns
   Customers          Product/service quality, innovativeness,
                        and availability
                       Responsible management of defective
                        or harmful products/services
                       Safety records for products/services
                       Pricing policies and practices
                       Honest, accurate, and responsible
Stakeholders’ Concerns (cont.)
Stakeholder Group   Examples of Concerns
   Employees          Nondiscriminatory, merit-based hiring
                        and promotion
                       Wage and salary levels and equitable
                       Availability of training and
                       Workplace safety and privacy
Stakeholders’ Concerns (cont.)
Stakeholder Group   Examples of Concerns
   Society            Environmental issues
                        •   Environmental sensitivity in packaging
                            and product design
                        •   Recycling efforts and use of recycled
                        •   Pollution prevention
                        •   Global application of environmental
Stakeholders’ Concerns (cont.)
Stakeholder Group   Examples of Concerns
   Society                Community involvement
                        •   Percentage of profits designated for
                            cash contributions
                        •   Innovation and creativity in social
                        •   Product donations
                        •   Availability of facilities and other assets
                            for community use
                        •   Support for employee volunteer efforts

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