Chapter 2 Business ethics 8e

Chapter Objectives• To identify stakeholders’ roles in business ethics • To define social responsibility • To examine the relationship between stakeholder orientation and social respons

Stakeholder Relationships, Social Responsibility, and Corporate Governance

C H A P T E R 2

Ethical Decision Making for Business 8e Fraedrich/ Ferrell/Ferrell

CHAPTER 2

Chapter Objectives

• To identify stakeholders’ roles in business ethics

• To define social responsibility

• To examine the relationship between stakeholder

orientation and social responsibility

• To delineate a stakeholder orientation in creating

corporate social responsibility

• To explore the role of corporate governance in

structuring ethics and social responsibility in business

• To list the steps involved in implementing a

stakeholder perspective in social responsibility and business ethics

Chapter Outline

• Stakeholders Define Ethical Issues in Business

• Social Responsibility and the Importance of a Stakeholder Orientation

• Social Responsibility and Ethics

• Corporate Governance Provides Formalized Responsibility to Stakeholders

• Implementing a Stakeholder Perspective

Relationships and Business

• Building relationships is one of most important areas

in business today

• Stakeholder framework

– Helps identify internal and external stakeholders – Helps monitor and respond to needs, values, and expectations of stakeholder groups

What Is a Stakeholder?

Primary vs Secondary Stakeholders

• Primary stakeholders: Those whose continued association is necessary for a firm’s survival

• Secondary stakeholders: Are not essential to a company’s survival

Social Responsibility and Ethics

• Social responsibility can be viewed as a contract with society

– Economic

– Legal

– Ethical

– Philanthropic

• Business ethics involves carefully thought-out

rules (heuristics) of conduct that guide decision

making

Corporate Governance

• Accountability

• Oversight

• Control

• Shareholder model

• Stakeholder model

Implementing a Stakeholder

Perspective

1 Assessing the corporate culture

2 Identifying stakeholder groups

3 Identifying stakeholder issues

4 Assessing organizational commitment to social

responsibility

5 Identifying resources and determining urgency

6 Gaining stakeholder feedback