Ethics problems in organizations focus on stakeholders
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ETHICS PROBLEMS IN ORGANIZATIONS Focus on Stakeholders. referencing Chapter 8 Trevino & Nelson, Managing Business Ethics . NY: Wiley, 1999. Understand the “stakeholder approach” to classifying ethical performance of firms.

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ETHICS PROBLEMS IN ORGANIZATIONS Focus on Stakeholders

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Ethics problems in organizations focus on stakeholders

ETHICS PROBLEMS IN ORGANIZATIONS Focus on Stakeholders

referencing

Chapter 8

Trevino & Nelson, Managing Business Ethics. NY: Wiley, 1999.


Objectives

Understand the “stakeholder approach” to classifying ethical performance of firms.

Identify categories of ethical problems at the organizational-level based on internal and external stakeholders.

3.Appreciate the concept of “escalation” in which matters starting as small issues become crises.

Objectives


8 steps to sound ethical decision making chapter 4 pp 85 90

8 Steps to Sound Ethical Decision-Making(Chapter 4, pp. 85-90)

  • Gather the Facts of the Situation

  • Define the Ethical Issues

  • Identify the Affected Parties (Stakeholder Analysis)

  • Identify the Consequences (Long v. Short-term, Symbolic Consequences)

  • Identify the Obligations

  • Consider Your Character and Integrity

  • Think Creatively About Potential Actions

  • Check Your Gut.


A stake

A “Stake”

  • A “Claim”

  • A right to something

  • A demand for something due or perceived to be due.


Stakeholder analysis also called constituent analysis see pg 86

Stakeholder Analysis(also called “Constituent Analysis”) see: pg. 86

  • Identify the parties affected (both harm & benefits) by your decisions.

  • Being able to see the situation through others’ eyes is a key moral reasoning skill.

  • “Role taking” (Kohlberg)

  • Start with those most immediately affected and work outward to include those who potentially may feel ‘collateral effects’.


Stakeholders include

Employees

Mangers

Owners (Shareholders)

Customers

Suppliers

Community

Stakeholders Include

~ Internal ~

~ External ~


Classifying stakeholders

Groups or individuals with whom the organization has a contractual relationship.

Customers, employees, shareholders, vendors & suppliers and government

Groups or individuals to whom the organization has obligations, but who are not contractual partners.

Community groups, citizens, other businesses, professional entities.

Classifying Stakeholders

~ Primary ~

~ Secondary ~


Factors that affect ethical behavior

Factors that Affect Ethical Behavior

Issue

Intensity

Individual

Characteristics

MODERATORS

Ethical

Dilemma

Stages of

Moral

Development

Ethical/

Unethical

Behavior

Structural

Characteristics

of Organization

Organizational

Culture


Issue escalation

Issue Escalation

  • Through mismanagement, denial, or malevolence, small problems mushroom into huge ethical, legal and public relations nightmares.


Ethics and consumers

Ethics and Consumers

Marketing : an exchange-based function in which relationships, trust and norms play critical roles.

As a consequence, the marketing function is fundamentally intertwined with ethical issues.


Consumer ethics

Consumer Ethics

Few laws protecting consumers before 1960’s.

Pure Food & Drug Act (1906) prohibited adulteration of food & drugs.

McPherson v. General Motors gave the right to sue auto mfgs. For defective vehicles.

1962 Kennedy Principles: 4 Consumer Rights

  • Right to Safety

  • Right to be Heard

  • Right to Choose

  • Right to be Informed


Due care theory consumer products services

“Due Care” TheoryConsumer Products & Services

  • Design:meet gov’t regs & specs; be safe under all foreseeable conditions, including misuse.

  • Materials:meet govt regs; be durable to withstand reasonable use.

  • Production:products made without defects.

  • Quality Control:products inspected regularly.

  • Packaging, Labels, Warnings:safely packed; clear directions for use; clear description of hazards.

  • Notification: manufacturers should have system to recall dangerous products after distribution.


Share holder ethics

Shareholder Ethics

  • Clear ethical obligation to “owners”

  • Serve the interest of owners & try to perform well economically over time.

  • Perform well in long term, not just short run.


Community obligations

Community Obligations

  • Companies are citizens in their communities.

  • Because of their size and complexity of relationships w/ community, they can have a disproportionate impact.

  • The most common issues are environmental.


Corporate social responsibility

Corporate Social Responsibility

INSTITUTIONALIZATION

PARTNERSHIPS

VOLUNTARISM

PHILANTHROPY


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