Business Ethics, the Changing Environment, and stakeholder

Management

Environmental Changes

• Technological ( piracy, outsoucing)• Legal (ban on plastics, sin taxes)• Economic (cheap labor)• Social (diverse workforce, expatriation)• Political (government processes)

Questions that arise?

• Who is right or wrong?• Who stands to lose or gain from this case?• Who gets hurt from this transactions?• Which groups ethical positions are the most

defensible?

Who are stakeholders? (who is affected?)

• Individuals• Companies• Groups• Nations-that respond to external issues, opportunities,

and threats.

Change is ushered by

• Scandals• Globalization• Deregulation• Mergers• Technology• Global terrorism

Point is

• This changes accelarates the uncertainty in which stakeholders make business and moral decisions

• E.g enron scandals affected investor confidence

• Anti trust software policies• outsourcing

Environmental forces and stakeholders

• This is the starting point of y and which we identify trends, issues, opportunities and ethical problems that affect people.

Economic environment

• Global business context as far as trade, markets and resource flows are concerned

• Product and business expansion over seas• Stock and bond interdependencies accross

borders

Technologically

• Outsourcing• Technology is changing company best

practices• Online economies and supply chains• Online privacy

Politically

• Emergence of china as an economic power• Cheap labor vs human trafficking• Cheap goods for questionble processes• China’s regulations in athletes development

Regulatory laws

• Food and drugs, fast tracks drugs for life threatening deseases but slow to remove unsafe drugs in the market

Legal

• Cybercrimes• Law enforcement• Legal partiality

demographically

• Sexuall harrasment• Diversity• Age, gender, ethnicity an the like

Stakeholder Management Approach

• Is a way of understanding the ethical effects of environmental forces and groups on specific issues that affect real time stakeholders and their welfare

• The key is to articulate a collabortive win win strategy based on:

1. Identifying the prioritizing issues, threats and opportunities

2. Mapping who the stakeholders are3. Identifying their stakes, interest and power

sources

4. Whowing who the members of coalitions are or may become

5. Showing what each stakeholder’s ethics are6. Develop collaborative strategies and dialogue

from a higher ground perspective to move plans and interactions to the desired closure for all parties

What is Business Ethics

• Business Ethics ask. “ what is right and wrong, good or bad, and harmful and benefecialregarding decisions and actions in organizational transactions?”

• Ethical solutions ot business and org problems may present more than one alternative, and sometimes no right solution my seem available

Ethical action, thinkling and reasoning enable us to:

• Be aware of a potential ethical problem• Evalaute values, assumptions, adn judgements

regarding the problem before we act• Learn how our decisions affect others, but

acting responsibly and accountably is still a choice.

Business Ethics

• Accdg to Laura Nash• The study of how personal moral norms apply

to activities and goals of commercial enterprise.

• Not a moral standard, unique problems for the moral person as an agenf of this system.

Business Ethics

• Three basic managerial decision making1. Choices of what the law should be whether

to follow them2. Choices about economic and social issues

outiside the domain of law3. Choices about the priority between

company’s interest and personal interest

Unethical business practices of employees

• Employees condone unethical practices by showing respect to those who achieve success doing it

• Common misconduct that is tolerated abusive behavior, misreporting work hours, lying, witholding need information

• Younger managers feel pressure to compromise ethics standards

Unethical business practices of employees

• 44% of employees still do not report the misconduct that they observe: top two reasons are:

1.belief that no corrective action will be taken2. Report will not be kept confidential

Unethical business practices of employees

• Younger employees with the lowest tenure are least likely to report misconduct, and they feel maangement and co worker will view them negatively if they report it

• 58% who report misconduct are satisfied with the response of their organization

Unethical business practices of employees

• Views of ethics is more dominant with middle and top managers, as they have less fear reporting misconduct and are more satisfied wit the response of the organization, they also feel that honesty and respect are practiced often than lower level employees.

Unethical business practices by industry

• Government• Sales• Law• Media• Finance• Medicine• Banking• manufacturing

Why does Ethics matter in business

• Doing the right thing matters• Save billions of dollar in potential

lawsuits,settlements and theft• Avoid deterioration of relationships, damageto

reputation, declining employee productivity, creativity and loyalty

• Avoid ineffective flow of information, absenteism and turnover

Why does Ethics matter in business

• Enable the company to attract and retain talented employees

• Leaders who practice integrity cascades throughout the organization and shapes values, tone and culture of the organization in terms of communication, realism, commitment and imagination of everyone in the company

Working for best companaies