Explain the role of ethics and social responsibility in developing a strategic plan, considering stakeholder needs. Society expects businesses to be responsible both socially and ethically. “Businesses are supposed to respect the environment, pursue fairness in dealing with internal and external customers, and strive to improve their communities” (Romani, 1998). Ignoring the ethical standards will have an adverse impact on businesses as well as the consumers. Although some unethical practices are exercised by some businesses, many businesses recognize the importance of ethics in their operations and enforce the ethical standards. Operations managers are expected to act ethically when making business decisions. Strategic plans help businesses to maximize stakeholder’s wealth and move business forward. The managers make decisions based on these strategic plans and strategies. Environment, internal and external customers, and the communities in which they operate must be taken into consideration when developing strategic plans. What do we do, for whom do we do it, and how do we excel are the questions businesses must answer to be ethical and develop strategic plans for their success (Wikipedia). Ethics and social responsibility must be made part of developing a strategic plan. Financial objective
A firms financial goal is to maximize shareholder wealth as is reflected in the market price of the stock. “The goal is in conformity with the best long-run interests of stakeholders and society in the long run” (Blackwellpublishing, 2009). Any financing or investment decision that improves the value of stakeholder’s stake in the business is acceptable. However, the managers must operate in the best interests of stockholders, not themselves, and do not attempt to expropriate wealth from lenders to benefit stockholders. “The managers are also expected to act in a socially responsible manner and do not create unreasonable costs to society in pursuit of stockholder wealth...
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