Business Ethics

Running Head : BUSINESS ETHICS

Business Ethics

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Business Ethics

The referent organizational stakeholders ' includes individuals or groups that , directly or indirectly , affect or are affected by organizational decisions and actions . The stakeholders in business organizations often include investors or shareholders , customers suppliers , employees , communities , the environment and society-at-large (Kossek and Lambert , 2005 . Stakeholders , in individual ways , share in the success or failure of the enterprise , sometimes directly , sometimes indirectly and sometimes inversely . As one example , competitors do all three

. They benefit directly from innovations brought to market by others when they can imitate them , and they profit directly when lobbying paid for by others brings about a favorable regulatory outcome Finally , competitors benefit inversely when others exit the market for reasons unrelated to the strength of the overall market , for example , an unrecoverable corporate accounting scandal limited only to the proprietor . A stake can be based upon ownership , such as for shareholders or participants in joint ventures . Some stakeholders have a legal stake outside of ownership , such as a contract to receive services for a specified timeframe or under specific conditions . Still others might simply claim an interest in the activities of the service provider , such as environmental groups representing the use of natural resources , human rights groups conducting employee advocacy or consumer groups

Though it appears paradoxical , the needs of stakeholders are especially important to the customer-centered enterprise , even when the stakeholders do not represent customers or specified customer segments Stakeholders affect customers for two reasons : first , because they shape the business - by regulating the relationship the service provider has with customers as governmental entities do , by affecting the service portfolio or the customer relationship as members of the distribution chain do . Furthermore , stakeholders and customers are not mutually exclusive groups the fervent environmentalist might evaluate a service provider 's philanthropic pro before selecting a service provider and the technical contact representing the buyer within a large corporate account might well participate actively in an important user group (Strouse , 2004

A relationship between ethics and efficiency also holds true at the level of the firm . Higher levels of ethical behavior should reduce opportunism and shirking while at the same time installing greater consumer and stakeholder confidence in the firm . In addition to this respect for consumer autonomy means mainly to respect the consumer 's right to choose between alternative and clearly labeled products (Donaldson and Dunfee , 1999 . This may lead to greater consumer demand and reduced regulatory costs

References

Donaldson , T Dunfee , T (1999 . Ties That Bind : A Social Contracts Approach to Business Ethics . Harvard : Harvard Business School Press

Kossek , E . E Lambert , S . J (2005 . Work and Life Integration Organizational , Cultural and Individual Perspectives . New Jersey Routledge

Strouse , K . G (2004 . Customer-Centered Telecommunications Services Marketing . Norwood , MA : Artech House , Inc

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