Ethics  &  Stakeholders Amali N Ediriweera Dept. of HRM FCMS- UoK
Stakeholders <ul><li>The people and groups that supply a company with its productive resources and have a claim on its res...
Stakeholders
Stockholders <ul><li>Want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in...
Managers <ul><li>Responsible for using a company’s financial capital and human resources to increase its performance </li>...
Employees <ul><li>Companies can act ethically toward employees by creating an occupational structure that fairly and equit...
Suppliers and Distributors <ul><li>Suppliers expect to be paid fairly and promptly for their inputs </li></ul><ul><li>Dist...
Customers <ul><li>Most critical stakeholder </li></ul><ul><li>Company must work to increase efficiency and effectiveness i...
<ul><li>Local Community  – provide employment, safe working environment, minimise pollution and negative externalities – p...
Business Ethics <ul><li>Tensions: </li></ul><ul><li>Profits versus higher wages </li></ul><ul><li>Production versus pollut...
Environment <ul><li>Waste  – land-fill? re-cycling? burning? </li></ul><ul><li>Energy use  – renewable energy,  non-renewa...
Externalities <ul><li>Impact on a third party of a business decision </li></ul><ul><ul><li>Those affected not involved in ...
Externalities <ul><li>Positive Externalities: </li></ul><ul><ul><li>Benefits to third parties of business activity </li></...
Externalities <ul><li>Government policies – encourage business activity that leads to positive externalities  and discoura...
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Ethics+lesson+2

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Ethics+lesson+2

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

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