MBA 6301, Business Ethics 1 Course Learning Outcomes for Unit II Upon completion of this unit, students should be able to: 2. Assess the ethical issues facing business leaders. 2.1 Explain the role of corporate reputation in an organization. 6. Analyze the influence of corporate culture, including leadership, power, and motivation, on business ethics in the workplace. 6.1 Explain the concept of stakeholders and stakeholder trust. 6.2 Define power, urgency, and legitimacy with respect to stakeholder theory. Unit Lesson How do companies determine which stakeholders are more important than others? Which group of stakeholders should the company be accountable to? Every company more than likely has customers, is part of a community, and publicly traded companies have hundreds if not thousands of stockholders; therefore, not all of them can be of equal importance. Stakeholder theory attempts to answer this question by applying three attributes to groups of stakeholders; power, legitimacy, and urgency. As defined by Stanwick and Stanwick (2014), “Power is the extent to which the organization can influence or impose its will on the stakeholder group” (p. 42). When an organization has the power to make a difference or to change a pattern in society, we would expect that they would. For example, the March of Dimes was started in 1938 by President Franklin D. Roosevelt to combat polio, which he was diagnosed with in 1921, and had left him unable to move his legs. After many years, its original goal of eliminating polio was accomplished, and the organization then had to make a decision to disband the organization or dedicate its resources to a new mission. The March of Dimes decided to change their focus to prevention of birth defects and infant mortality. Since they had such a successful accomplishment with combatting polio, it was seen that they would be a success in this mission also. In 1976 the organization changed its name to the March of Dimes Birth Defects Foundation. By using their power of influence and after President Franklin Roosevelt, himself a victim of polio, meets with March of Dimes executive Basil O'Connor (March of Dimes Birth Defects Foundationi, ca. 1944) Reading Assignments Chapter 3: Stakeholders and Corporate Social Responsibility Supplemental Reading See information below. Suggested Further Reading See information below. Learning Activities (Non-Graded) See information below. Key Terms 1. Constricted philanthropy 2. Corporate philanthropy 3. Corporate social responsibility 4. Dispersed philanthropy 5. Distribution expectations 6. Engaged firm 7. Idealistic firm 8. Legitimacy 9. Moral managers 10. Peripheral philanthropy UNIT II STUDY GUIDE Stakeholders Needs in Ethical Foundation MBA 6301, Business Ethics 2 such a successful program combatting polio, the organization continu ...

1. MBA 6301, Business Ethics 1
Course Learning Outcomes for Unit II
Upon completion of this unit, students should be able to:
2. Assess the ethical issues facing business leaders.
2.1 Explain the role of corporate reputation in an organization.
6. Analyze the influence of corporate culture, including
leadership, power,
and motivation, on business ethics in the workplace.
6.1 Explain the concept of stakeholders and stakeholder trust.
6.2 Define power, urgency, and legitimacy with respect to
stakeholder theory.
Unit Lesson
How do companies determine which stakeholders are more
important than
others? Which group of stakeholders should the company be
accountable to?
Every company more than likely has customers, is part of a
community, and
publicly traded companies have hundreds if not thousands of
stockholders;

2. therefore, not all of them can be of equal importance.
Stakeholder theory
attempts to answer this question by applying three attributes to
groups of
stakeholders; power, legitimacy, and urgency.
As defined by Stanwick and Stanwick (2014), “Power is the
extent to which the
organization can influence or impose its will on the stakeholder
group” (p. 42).
When an organization has the power to make a difference or to
change a
pattern in society, we would expect that they would. For
example, the March of
Dimes was started in 1938 by
President Franklin D.
Roosevelt to combat polio,
which he was diagnosed with
in 1921, and had left him
unable to move his legs. After
many years, its original goal of
eliminating polio was
accomplished, and the
organization then had to make
a decision to disband the
organization or dedicate its
resources to a new mission.
The March of Dimes decided
to change their focus to
prevention of birth defects and
infant mortality. Since they had
such a successful
accomplishment with
combatting polio, it was seen
that they would be a success in

3. this mission also. In 1976 the organization changed its name to
the March of
Dimes Birth Defects Foundation. By using their power of
influence and after
President Franklin Roosevelt, himself a victim of
polio, meets with March of Dimes executive Basil
O'Connor (March of Dimes Birth Defects Foundationi, ca.
1944)
Reading
Assignments
Chapter 3:
Stakeholders and
Corporate Social
Responsibility
Supplemental
Reading
See information below.
Suggested Further
Reading
See information below.
Learning Activities

4. (Non-Graded)
See information below.
Key Terms
1. Constricted
philanthropy
2. Corporate
philanthropy
3. Corporate social
responsibility
4. Dispersed
philanthropy
5. Distribution
expectations
6. Engaged firm
7. Idealistic firm
8. Legitimacy
9. Moral managers
10. Peripheral
philanthropy
UNIT II STUDY GUIDE
Stakeholders Needs in
Ethical Foundation

5. MBA 6301, Business Ethics 2
such a successful program combatting polio, the organization
continues today
to make a difference in many lives.
Stanwick and Stanwick (2014) define legitimacy as, “the
assumption that the
actions of the corporation are desirable, proper or appropriate
within the limits
of the corporation” (p. 42). For example, both Chick-fil-A and
Hobby Lobby
have chosen to close on Sundays. Both corporations believe that
Sunday is a
day of rest, worship, and to spend time with family and friends;
therefore, they
decided to close on Sundays.
Urgency is defined as, “the degree on which the issues raised by
the
stakeholder must be dealt with in a time-sensitive manner”
(Stanwick &
Stanwick, 2014, p. 42). In 1982, Tylenol was faced with an
urgency to recall all
its Extra-Strength Tylenol after seven people died after taking
the over-the-
counter pills which were laced with cyanide in them. This was
in the Chicago
area, and it was later discovered that someone in the area had
went in and
tampered with the pill bottles, placing cyanide in them. Johnson
& Johnson, the

6. owner of Tylenol, acted urgently to take all of the Tylenol
bottles off the shelves
for fear of other people dying. Tylenol issued a recall for 31
million bottles
worth 100 million dollars. Most believed that this was the end
of Tylenol and
people would never purchase another pill from them. However,
Tylenol came
up with a public relations campaign.
The Tylenol situation is a good example of corporate social
responsibility in
action. This was the first mass recall in the United States, and
therefore,
Tylenol set the bar for corporate social responsibility and this
situation was the
model for other corporations to consider the impact of their
legal responsibility
and fiduciary duty within a moral context.
Corporate philanthropy is used to improve the image and
reputation of the firm,
and the result will be an enhanced competitive advantage. Often
times when
we see a corporation involved in philanthropy, society believes
that
organization is in a position where they are either giving back
to the community
or looking for a tax write off. Bill and Melinda Gates are
examples of corporate
philanthropy; their organization has embraced 150 billionaires
to donate a
portion of their wealth for combating AIDS and improving the
health of third
world countries.

7. There are four common types of corporate philanthropy. These
consist of
community grants, employee matching gifts, employee
volunteer grants, and
volunteer support grants.
Community grant programs offer local communities the
advantage to get
funding from their local corporations and organizations. Often
times, we will
see local small businesses that will sponsor a little league
baseball team or a
local track team. When natural disasters happen in a local
community,
corporations are willing to give back to their communities that
support their
businesses. Most of these community teams or organizations are
non-profits
that have a 501c3 where the corporation or company can receive
a tax break.
Wal-Mart often grants local community funding. They use this
process through
their team of Wal-Mart associates at each store.
Employee matching gift programs are when the company
matches the
employees’ contributions and together give to a needy
organization. For
example, in some fortune 500 corporations employees can chose
to give into a
list of non-profit organizations where the employees can have
money come out
of their paychecks or give a one-time donation and the
corporation then
matches the employees’ giving. Several corporations use this
matching gift

8. program; even the U.S. Army used this in the 1980s, allowing
soldiers to give
11. Power
12. Pragmatic firm
13. Skeptical firm
14. Stakeholder
15. Strategic philanthropy
MBA 6301, Business Ethics 3
to their favorite charity and they in return would match the
giving. This giving is
usually done for one year or giving once a year during a fund-
raising drive.
Volunteer grant programs are local organizations that give back
to their
community during natural disasters or in time of need. We have
seen
organizations such as local churches that will partner with a
homeless
organization to aid in feeding the homeless, therefore, giving
back to
communities. Also we have seen local city government
partnering with
Homeland Security to aid communities hit with natural
disasters. For example,
when Hurricane Ike hit the Houston area in September 2008 and
96% of the
city of Houston was without electricity, Homeland Security
employees

9. partnered with city and state government to assist citizens in
need of water and
food. In this process, local organizations such as the churches
and non-profit
organizations volunteer their services in the disaster.
References
March of Dimes Birth Defects Foundation. (ca. 1944). President
Franklin
Roosevelt, himself a victim of polio, meets with March of
Dimes
executive Basil O'Connor. [Photograph]. Retrieved from
http://commons.wikimedia.org/wiki/File:Roosevelt_OConnor.jp
g
Stanwick, P. A., & Stanwick, S. D. (2014). Understanding
business ethics (2nd
ed.). Thousand Oaks, CA: Sage.
Supplemental Reading
Click here to access the Chapter 3 PowerPoint Presentation.
(Click here to
access a PDF version of the presentation.)

10. Suggested Further Reading
These videos and web resources provide further insight into
business ethics.
Although you are not required to view these, watching a few of
the videos and
becoming familiar with the web resources will further your
understanding of the
topic. Captions are available for most videos by clicking the
“Transcript” button
below the video in YouTube.
Videos:
Corporateethics. (2009, October 1). What is stakeholder theory?
- R. Edward
Freeman [Video file]. Retrieved from
http://youtu.be/bIRUaLcvPe8
Education Futures. (2011, May 18). Ethical cheating - Dr.
Arthur Harkins [Video
file]. Retrieved from http://youtu.be/JmKiNIF8qYo
TEDx Talks. (2010, October 8). TEDxToronto - Bruce Poon tip
"Beyond the
triple bottom line” [Video file] Retrieved from
http://youtu.be/xbeUftMoFUQ
Web Resources:
CSR Wire. (2014). The corporate social responsibility
newswire. Retrieved

11. from http://www.csrwire.com/categories/23-Corporate-Social-
Responsibility/press_releases
Net Impact. (2014). From the blog. Retrieved from
https://netimpact.org/
https://online.columbiasouthern.edu/CSU_Content/courses/Busi
ness/MBA/MBA6301/14I/UnitII_Chapter3Presentation.ppsx
https://online.columbiasouthern.edu/CSU_Content/courses/Busi
ness/MBA/MBA6301/14I/UnitII_Chapter3Presentation.pdf
MBA 6301, Business Ethics 4
Learning Activities (Non-Graded)
NOTICE: These are all non-graded Learning Activities, so you
do not have to
submit them. If you experience difficulty in mastering any of
the concepts,
contact your instructor for additional information and guidance.
Visit the Student Study Site at www.sagepub.com/stanwick to
access the
following resources:

12. -mail address to submit results
to)
http://www.sagepub.com/stanwick