Business Ethics Management
Business Ethics Management. According to Carroll and Buchholtz (2014), “stakeholder theory is a theory of business ethics and organizational management that addresses values and morals of managing organizations.” Therefore, stakeholder management theory evaluates the relationships between an organization and others in its external and internal environments. Besides, it allows companies to assess how these connections influence the performance of business activities or operations. Stakeholders can affect an organization location, profitability, and its long-term success. The most significant stakeholders are employees, customers, government, suppliers, stockholders, non-profit groups and local communities.
Business Ethics Management, Stakeholder management theory.
Stakeholder management theory is essential to organizations as it helps manage the relationships of all stakeholders effectively. This helps to establish competitive and sustainable strategies to survive longer and perform better than other organizations which fail to focus on useful stakeholder theory (Carroll & Buchholtz, 2014). Hence, it is essential for organizations to develop specific stakeholder competencies that allow them to be committed to monitoring their interests and strategies that effectively deal with stakeholders and their concerns. Also, it is important to categorize and divide interests into segments which are manageable and make sure that the organization’s functions address the demands and needs of all stakeholders. Thus, business ethics plays significant implications in these relationships. The stakeholder theory addresses ethical implications and the obligation of corporations to maximize shareholders’ wealth.
Business Ethics Management, Triple-bottom-line outcomes
According to Loi (2016), stakeholder management can be strategic competencies that draw capabilities of resources throughout companies to generate attractive triple-bottom-line outcomes. This strategy lessens the tensions between stakeholders and shareholders of a corporation. Ethical implications and stakeholder manager are organizational mechanisms which are firmly embedded on the corporations’ strategic management and strategizing operations. It is essential to generate attractive triple-bottom-line outcomes by conjuring up potential connections between business ethics and stakeholder management theory.
Business Ethics Management, Case Scenario
The case provides the best approach to use business ethics and stakeholder theory to satisfy different stakeholders of the company. With the corporation focusing on garments and US markets, the strategy to move to a different country will impact different stakeholders, especially its large contingent of workers in local communities in the Eastern US. This will have many implications as the corporation is the primary employer in all those communities. However, the strategic move will improve the company profitability and ensure continuous growth sustainability in long-run (Carroll & Buchholtz, 2014).
Business Ethics Management, Employees and Unions
Employees of the corporation will be the most impacted stakeholder due to shifting to oversee markets. This means there will be massive layoffs and lack of a union for the large workforce will impact the success of the company. The change of location should keep the interests of employees aligned and moving in the same direction. The decision to shift manufacturing facility to a developing country and discontinue various marketing ads will affect employees’ pay and job security. Employees are primarily impacted in-terms of economic well-being and share a common concern regarding wage (Carroll & Buchholtz, 2014). Therefore, the company must strategically establish or offer benefits and other compensation packages that will satisfy employees. The lack of continuing economic health of the corporation will impact employees adversely. The decision to shift company manufacturing facilities and discontinuing other services will affect employees’ job security which could affect the unions and other relationships with the company. The corporate culture will be impacted negatively as employees will be lack of job satisfaction and fulfillment. Employees are the vital assets of the business organization, and a lack of job security will lead to a lack of job satisfaction which will lead to reduced profits and company performance. Therefore, a large portion of the employees’ jobs and livelihood are at stake as well as their well-being. Besides, those who work at the corporations stand to lose their income source if the business shifts its manufacturing facilities and discontinues ads. This, this strategy puts employees in danger of losing their happiness and well-being (Carroll & Buchholtz, 2014).
Business Ethics Management, Communities
The local community faces a massive lack of stable livelihood in case the company adopts the new strategy. The personal and economic well-being of the local communities is at stake. This is because the local communities are receiving tax revenue and job availability from the current operations of the corporations by proving local business presence. The shift of business operations will affect the well being local communities and result into massive unemployment level, and clothing products will have increased prices due to importing taxes imposed. However, the communities also stand a chance to benefit if the manufacturing facilities were polluting local water supplies and causing pollution (Carroll & Buchholtz, 2014).
Business Ethics Management, Stockholders
Stockholders are significant stakeholders of any business operations. The shifting of manufacturing facilities and discontinuing of other operations to a developing country save money regarding reduced labor costs and a significant reduction in total cost per unit of production. This will increase the profits resulting in an increased value of corporation stocks. The stockholders face the prospect of increased share values if the corporation continues saving costs and improving its profitability. However, if the strategy fails, their money is at stake (Loi, 2016). The stockholders of the corporation stand to gain from the prospect of sustainable profitability from overseeing markets.
Business Ethics Management, Recommendations
In the light of the above-affected stakeholders by the decisions of a business, the corporation has the obligations to them. Therefore, the corporation has a duty to all stakeholders, especially those who have a stake in strategic decisions and conducting business. The corporation should follow the rule of exit and entry in creating, terminating and re-negotiation in order to ensure contract relationships exist between business and all stakeholders. The ethical implications and principle of governance should unanimously consent by all stakeholders. Right compensation should be used to benefit all stakeholders whom their well-being is stake as well as using the limited immortality that business operations will continue its business existence is in the interests of all stakeholders. Order a similar essay here.
Business Ethics Management, References
Carroll, A., & Buchholtz, A. (2014). Business and Society: Ethics, sustainability, and stakeholder management. Nelson Education.
Loi, T. H. (2016). Stakeholder management: a case of its related capability and performance. Management Decision, 54(1), 148-173.