The purpose of this paper is to explain and define the role of ethics and social responsibility in developing a strategic plan while considering stakeholder needs and agendas. This paper will include an example of a corporation overstepping ethical boundaries for stakeholder agendas and what type of preventative measures were used to avoid to the situation.
“It is said a corporation has no morality, but a corporation with conscience men is a corporation with a conscience-Henry David Thoreau
Strategic ethics and social responsibility are two of the most important roles in any business. Ethics and responsibility go hand in hand each plays an extremely vital role in business today depending on how a corporations see’s their policies, procedures, and practices. Policies and procedures are in place to administer order and structure in an organization. Management oftentimes undermines these rules and regulations due to acquiring higher measures on their return on investment (ROI) and earnings per share (EPS) to show social responsibility within the company or a division’s ability to achieve a profitability objective.
These type of imputed measures, however, can be misleading for evaluating corporate objectives such as ROI and EPS profits can be erroneously computed within such a period.
Even though it tells what happened after the fact it’s not showing what is happening or what will happen. A Corporations fiscal responsibilities are to manufacture goods and services that society needs and desires at a value that can achieve a positive profitability ratio and satisfy its obligations to its investors, while keeping within legal responsibilities the law. These responsibilities are defined as practices or events that are expected of businesses by society but are not ordered in law. The concept of social responsibility proposes at times a question of who is to blame for unethical tactics when it comes to business. Strategic decisions often influence other entities than just the company. There are substantial tax loopholes and creative accounting are part of the same dynamic for profits regardless of social cost. This can create a continual shifting of production to locations with lower wages. When it comes to investors or stake holders Executives have admitted they have received huge bonuses or stock options that were backdated to guarantee they would make the stockholders pockets even fatter from investing in their company. Regardless of whether their performance caused the stock’s value to rise or fall. These decisions can raise questions regarding the suitability of the company mission and objectives. Ethics becomes complicated when dictating the value of making there company more profit for the stockholders and choosing to overlook the one value over another such as their employees. Stock holders have every right to see that investor profitability comes first.
According to Professor R. Edward Freeman, in his book Strategic Management: A
Stakeholder Approach The term "stakeholder" appears to have been invented in the early '60s as a deliberate play on the words such as stockholder or todays modern term such as investor this is to indicate that there are other parties having a "stake" in the decision-making of corporate finances to those holding equity positions.(Pitman, 1984)
Edward freeman penned this as “Stock Holders Analysis”. Stakeholder Analysis (SA) is a methodology used to facilitate corporate and policy processes by accounting for and often incorporating the needs of those who have a financial stake’ or interest in the reforms under consideration. With information on stakeholders see their interests, and use their capacity to oppose reform, or advocate choice on how to best accommodate companies assuring policies adopted are politically realistic and sustainable. ( http://www1.worldbank.org/).
Freeman states that multi-fiduciary stakeholder analysis is at times…