Stakeholders, Ethics, and Corporate Social Responsibility 4 Chapter Stakeholders, Ethics, and Corporate Social Responsibility McGraw-Hill/Irwin Principles of Management © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

Stakeholders Government General public Employees Customers Distributors The Firm Creditors Suppliers See Learning Objective 1: Identify stakeholders in an organization. See text page: 82 Shareholders Local communities

Evaluating Stakeholders Claims Identify stakeholders interests and concerns Identify claims stakeholders place on the organization Identify Stakeholders Take actions, starting with those that address the claims of the most important stakeholders See Learning Objective 1: Identify stakeholders in an organization. See text page: 84 Weight stakeholders by their importance to the firm Identify actions to satisfy claims of various stakeholders

Question Identify and evaluate the stakeholder claims for your university. See Learning Objective 1: Identify stakeholders in an organization. See text page: 84 Question This should be an interesting exercise for the students. They should be able to see the bigger picture with regards to all the parties that have stakes in a university other than students, faculty, and the administrators.

Ethical Rights of Stakeholders What is a company’s responsibilities to: Shareholders Customers Employees Suppliers Competitors Communities See Learning Objective 2: Describe the most common types of ethical issues managers confront. See text page: 86

Roots of Unethical Behavior Employees with poor personal ethics Immoral leadership Unethical behavior See Learning Objective 2: Describe the most common types of ethical issues managers confront. See text pages: 90 Unrealistic performance goals Unethical organization culture Failure to consider ethical issues

Behaving Ethically What managers can do to make sure that ethical issues are considered: Establish an ethics officer Have leaders promote ethical behavior Develop strong governance processes Promote moral courage Consider ethical aspects of business decisions Promote an ethical organization culture Hire and promote ethical individuals See Learning Objective 3: Explain how managers can incorporate ethical factors into their decision making. See text pages: 94

Social Responsibility A sense of obligation on the part of managers to build certain social criteria into their decision making. When managers evaluate decisions, there should be a presumption in favor of adopting courses of action that enhance the welfare of society at large. WHO should make the decision about how to be SR? See Learning Objective 4: Outline the main segments for and against corporate social responsibility. See text page: 97

Arguments for SR Right way for a business to behave Need to give back to the society that helped make their company It can lead to better financial performance Ignoring this may generate ill will and opposition See Learning Objective 4: Outline the main segments for and against corporate social responsibility. See text page: 98