Business Ethics Terms Summary Paper
27 February 2012
1.) Stakeholders are defined as customers, investors and shareholders, employees, suppliers, government agencies, communities, and many others who have stake or claim in some aspect of a company’s products, markets, operations, industry, and outcomes. They are influenced by business, yet they also influence businesses. The relationship between stakeholders and businesses is very similar to the relationship a husband and wife would share, in the aspect that it is a two way street.
The influence that a stakeholder or a special interest group has over businesses can be seen all the time. In certain cases, stakeholders take part in activities that highlight negative things about a company and the products they are producing. This negative press can spark a change in the company’s practices. An example which is given in the required text, speaks of consumer groups (also known as stakeholders) who have been lobbying and fighting to improve the nutritional value of foods that are created and marketed towards children. As a result of this, cereal manufacturers such as General Mills and Post Foods responded by reducing the sugar levels to 9 grams or less per serving, in certain cereals that are targeted at children ( Lucky Charms, Cocoa Pebbles, Fruity Pebbles, etc..).
A company would not be a company if it did not have its stakeholders. It would be difficult for a company to grow and prosper without the engagement of employees, agencies, special interest groups, etc. According to the Stanford Research Institute regarding stakeholders, "those groups without whose support the organizations would cease to exist.” 2.) According to the text Business Ethics: Ethical Decision Making and Cases, one difference between a regular decision and an ethical decision whether it be applied to business or everyday life, lies in “the point where the accepted rules no longer serve, and the decision maker is faced with the responsibility for weighing values and reaching a judgment in a situation which is not quite the same as any he or she has faced before”. Based on the above, the concept of business ethics can begin to take form. Business ethics comprises the principles, values, and standards that guide behavior in the business world. One aspect that must be considered when applying ethics to business, is earning a profit. A profit must be made in order to survive. On the contrary, if a business is producing profits through misconduct, the life of the business can end just as quickly as it began. Misconduct is commonly pointed out by competitors. This can through the battle between Microsoft’s Bing search engine and Google. Google accused Microsoft of copying its search engine results. They did this knowing how damaging this could be to Microsoft. Microsoft fired back saying that Google was just pulling a publicity stunt.
Another aspect that also has to be considered is businesses must balance their desire for profits against the needs and desires of society. This in most cases requires compromises. In order for these aspects to be successfully addressed, rules have been developed by society. These have been put in place to help guide businesses in the attempts to make a profit. If businesses operated without business ethics, profits would be made in an unfair way.
3.) During the 1960’s there was a rise of social issues in businesses. American society witnessed the development of an anti-business trend. This was due to critics attacking the interests that controlled the economic and political aspects of society. During this period there was also a rise of consumerism. These were activities undertaken by independent individuals, groups, and organizations to protect their rights as consumers. John F. Kennedy outlined four basic consumer rights in 1962, which became known as the Consumers’ Bill of Rights. The Consumers’ Bill of Rights included: the...