(initial posting by Sun 15th, follow-up on another posting by Thurs 20th)
After you've read the selections from Chpt 6 and watched the video about corporate social responsibility, are you convinced that a company ought to take all stakeholders into account when making business decisions? What ethical theory(s) support stakeholder theory?
Can you think of a company that appears to do business with considerations of all/most stakeholders? What about an example of a company that doesn't appears to consider stakeholders broadly? Perhaps it is only focused on profits narrowly construed, or is inconsistent, or just doesn't seem to care about a large part of the stakeholders?
After watching the video and reaching the chapter I do believe that corporations should take stakeholders into account when making business decisions. Providing the best places to work with fair wages and a good environment are certainly important; I believe it is equally important that corporations consider their responsibility, not just for publicity or marketing stake, but for the greater humanity sake. Doing unto others as you would have them do unto you (Golden Rule) seems to fit with the ethical theory in support of stakeholder theory. The interesting point the chapter made is that each of us, whether employee, executive, CEO, stockholders, etc. all have responsibilities to do the right thing.
ReplyDeleteI think there are a lot more companies today doing the right thing in consideration of stakeholders, but the one that comes to mind is Microsoft and Bill Gates. They pay good wages, set the proper examples by giving back to local schools through scholarships and grants for new computers and give to underprivileged groups. While profit is still important to them, they seem to encourage philanthropy by their own actions. As to a company that seems to be more focused on profits and inconsistent messages and examples - I'd say you could pick almost any bank - but Bank of America comes to mind. They were heavily involved in the housing and financial crisis, not considering prudent lending practices, but more interested in profits for executives and stakeholders; they purchased Countrywide who was more like a predatory lender and then when people found themselves in trouble, the bank was a big part of the housing demise - they had attorneys who were robosigning foreclosures; not until fines and laws came into place did banks in general start looking at ways to help their consumers. I'd say they have been inconsistent with their message; advertisements about giving back to communities through education about finance, but their actions over the past five years do not back it up.
I think you hit the nail on the head with the example of the bank. Greed! Corporate Greed but us in the 2008 recession. I hope we all learned a lot from that.
DeleteI also think you bring up another point about community service. I think community service will help make a company be prosperous and gain loyalty if done right.
I think that without attention and consideration to all the stakeholders that make up the company network, a company will flounder. Consideration for these groups of individuals means that everybody wins. If you keep suppliers happy, they are more likely to treat you better or be more flexible with your company. Customers who know that their input and needs are heard and met are more likely to be loyal to a company. This can go on and on.
ReplyDeleteWhen I think about companies trying to do right by their stakeholder I think of Whole Foods and Chipotle both of which are trying to take into account not just their human stakeholders but also the environment and animals themselves. They work to try and provide food, and products that are environmentally sound, as well as unaltered and humanly grown and raised. Not all companies take half of the stakeholders into account much less include additional (though important) ones.
Every stakeholder to a company's product or service is important. I believe that depending on what you're offering some of those stakeholders can be more important than others. If you are using things such as crowdfunding then obviously that stakeholder would have more of a say than someone who is not directly involved. In order to build a business you must take care of the one's who helped you get there. By increasing the number of clients, employees, managers, and so on you have to ensure that they are happy in order to build upon your success. I think that company with social responsibility helps the overall dynamic of the business, when you give to others you will receive in ways that you may not have thought of. I'm a firm believer that you should not burn bridges because those people could come back to either support you or throw you under the bus.
ReplyDeleteOnce again this didn't save my first post :(
ReplyDeleteSo this will probably be a little shorter because I am aggravated :)
Yes I do think that a company should make decision based on all the stakeholders. These people are the backbone of the company, and the people that usually support the company one way or another.
When I think about what ethical theory applies to this I think it is Utilitarinism because it is rule based and considers the good for the collective.
When I think about what companies are good, I immediately thought about Whole Foods just like Kimberly mostly because in another class we watched a video about how thoughtful they are with every decision they make. They are truly a unique company. I can not think of a company in particular that does not. I think I am having a moment right now :(. I agree with what Lorraine said in regards to some banks making bad decisions which helped lead to the financial crisis.
After watching the video and reading the chapter I do believe that stakeholders’ opinions/ideas should be considered when making business decisions. This will allow for every side of the business to have an influence on the final decision. This would allow for a better work place, appropriate wages, the correct dynamic and understanding of the suppliers, and customer input is always valuable. This would allow the stakeholders to do the right thing in helping the firm survive. Most the time we are all in it for the greater good and have the responsibility to do the right thing.
ReplyDeleteWhat ethical theory supports the stakeholder theory? One that I think makes the most sense is that Golden Rule. I believe that no one is really out to make a firm fail, therefore, most of the times we are there to support the company unless there are ethical issues occurring.
In a recent class we watched a video on Whole Foods. This was one company that popped into mine mind when asked of a company that is keeping all stakeholders in mind when making a decision. Trying to keep the environment and their customers in mind when selling products. A company that comes to mind that is not doing this is McDonald’s. I feel that this company markets to children and a very unprofessional way.
As a sign of the times, I think most all of us believe in some form of the stakeholder theory. I personally look at it from so many different angles, and I often conflict myself. I believe that businesses exist to make a profit, and quite often they do not care nor do they need to care about all of the stakeholders. I am not saying that I agree with this, but it is the way it is. I challenge us to look at professional athletes. Do they really need to be role models? Should they be held to a higher (or at least equal) standard because of their exposure, salaries, sports career, etc... Let's use football. Football is an extremely violent sport, and we love it for the violence. Should we honestly expect the participants not to be violent off the field as well? Why does it matter that Ray Rice beats his wife, that Adrian Peterson beats his kids, or that Adam Jones shot a guy outside a nightclub (by the way this resulted in lifetime paralysis for the victim)??? I do not know if it does matter as long as they do their jobs well. Premier athletes have lived a life of privilege, and they have rarely been held accountable for their actions. These people literally live by a different set of rules. This often starts in high school, and it continues on through their professional careers. I argue the stakeholder theory in reverse. Everyone who contributed to, or profited from these athletes actions should be held accountable. Why do we only pay attention now that it is in the media limelight. It is not enough for the NFL to suspend them, sponsors to drop them, or teams to fire them. These athletes have brought mega millions of dollars to universities, cities, sports teams, corporations, sponsors, etc... The list could go on forever. These stakeholders will spend money to clear things up , but the dollar amount will pale in comparison to how much these three athletes alone have brought in.
DeleteColette, you point out an excellent example. Whole Foods which is often referred to as Whole Paycheck. WF does a fantastic job at considering stakeholders, and minimizing negative impacts. This obviously comes at a price. Their stuff is not cheap. I usually go out of my way to buy goods and services from organizations like WF. This practice limits my choices, impacts my finances, and severely limits my purchasing power. However, I believe this is the right thing to do. IMHO we must do this, or we are no better than the NFL or any other organization that solely exists for profit. The fate of stakeholder theory is ultimately up to us as consumers and business professionals......
Just to add onto your professional athlete discussion... I think I have an example where an athlete was held up to normal standards. Let's think about Michael Phelps, a multiple Olympic gold medalist, I feel that the mistakes he has made has resulted in bad public media. Resulting in a lost of sponsors and endorsements, suspension, and upset fans. He did not hold up to his agreement, therefore, resulting in actions that I am sure the sponsors did not like making. However, even though he did his job well he was still held accountable for his action. I fell this is no different that what we see today in every day life. Lets use construction as an example. I am owner of a construction company and I give random drug test. If my employee fails the drug test then he is fired on the spot because when he agreed to work for me it stated in his contract that he would not use drugs. If any test came back positive it would result in immediate termination. I feel this is no different than your example above with the football players; I am sure it is part of the contract. They picked this career and along with it comes media.
DeleteI agree. People need to have some responsibility for their actions and understand there are consequences with everything you do. You cannot just say I didn't know or were unaware that endorsements and contracts "could" be cancelled because of this or that. Take some ownership people!
DeleteLorain to your point, as parents I believe this a task that we try to teach on a daily basis.
DeleteI have always believed that stakeholders should be considered when business decisions are being made. I think this applies to corporations, governments, groups, institutions, individuals, etc... Many of my views are quite liberal, so I consider stakeholder theory to be a natural way of doing things. I also agree that businesses exist to make a profit. I do not agree with profiteering to the same extent as Milton Friedman, but I do agree with many of his arguments. The problem is that we rely on humans to make these decisions. Humans are flawed, and they will often make a decision with a bias as to how it affects their needs and interests. I would say that Kant and Aristotle would agree with the stakeholder theory.
ReplyDeleteI would argue that energy companies are some of the biggest abusers of outside stakeholders. They spend big bucks on public image because they have to. After the gulf oil spill, BP put together a huge public image campaign. However, in the end many stakeholders were left with denied claims for compensation. The latest reports indicate that there is a huge mass of oil that has gathered on the ocean floor from a spill that was supposedly cleaned up. Timber, oil, coal, natural gas, etc... mostly all do the same thing. The bottom line is profit. The latest one to watch is the Keystone pipeline.
To keep it on an environmental level, Patagonia is a corporation that lives and dies by the stakeholder theory. Much of Patagonia's existence is tied to doing good for the world around it. Stakeholder theory is at the absolute heart of Patagonia's business practices.
AGREED! That stakeholders should be considered for aiding in the final business decision. The people at the forefront may not understand all aspects of the decision. An example that I have would be related to work, we are currently revamping all survey programs at Macy's and we have our ideas on what should be done and can guide the business owners / stakeholders in which way to go. However, we are not involved in the day-to-day business so we might not understand what is needed from that aspect. If my team would have just continued to roll with our ideas we could have lost very important information.
DeleteI LOVE PATAGONIA! They are an awesome company.
Companies are making major business decisions everyday and sometimes they can be very complex. A stakeholder should be not only considered but have voice in the final decision. An employee get paid a salary, but what do they get in exchange for the product they help to create? I believe that every company should grant share/s to each of its permanent employees so that the corporates can be held accountable.
ReplyDeleteActions that benefit a corporation are not the same things that benefit the employees or the nation. Corporations are NOT People.