Business ethics is considered to be an oxymoron. This perspective reflects not only that business and ethics are contradictory but that business is generally not ethical. The traditional view held by economists (von Mises, 1949) and Friedman (1962) holds that morality, while good in and of itself, if self-imposed by business organisations, is in essence wrong in that it detracts from their embedded economic purpose to increase profits for owners.
This traditional view doesn’t take into account that businesses acting unethically can result in a range of costs and adverse consequences that effect the bottom line returns for its owners such as; financial losses, fines, executives losing their positions, eroded reputations and in extreme cases, business closure.
Furthermore, business owners would see a greater bottom line return for using ethical business practices due to increased; regulatory freedom, investor confidence, supplier/partner trust, customer loyalty, employee performance and litigation/indictment avoidance. Therefore business ethics would no longer be considered a contradiction in terms because it no longer detracts from a business’s economic purpose of increasing profits for its owners.
How is effective stakeholder management related to sustainability?
Effective stakeholder management should be at the core of any business’s strategy. This process requires a strong commitment on the part of management and demands a careful assessment of the five key questions to deal successfully with those who assert claims on the organisation. Business has been and will continue to be subjected to careful scrutiny of its actions, practices, policies, and ethics. Stakeholder management helps deal with these issues (Bylerlym, 2013). If the firm is unable to effectively manage its many stakeholders it could be hurt in many ways including financially (short term or long term) or in terms of its public image or reputation in the community, thus why effective stakeholder management is related to sustainability.
The opportunities are for business to build decent, productive working relationships with the stakeholders. Challenges, on the other hand, usually present themselves in such a way that the firm inust handle the stakeholders acceptably or be hurt in some way-financially (short term or long term) or in terms of its public image or reputation in the community.
P84 Within that context, developing a strong stakeholder culture is a major factor supporting successful…