Ethical Decision Making for Business 8e Fraedrich/ Ferrell/Ferrell

CHAPTER2
CHAPTER2

Stakeholder Relationships,
Social Responsibility, and
Corporate Governance
 Chapter Objectives

To identify stakeholders roles in business ethics

To define social responsibility
To examine the relationship between stakeholder
orientation and social responsibility
To delineate a stakeholder orientation in creating
corporate social responsibility
To explore the role of corporate governance in
structuring ethics and social responsibility in business
To list the steps involved in implementing a
stakeholder perspective in social responsibility and
business ethics
 Chapter Outline

Stakeholders Define Ethical Issues in Business

Social Responsibility and the Importance of a
Stakeholder Orientation
Social Responsibility and Ethics
Corporate Governance Provides Formalized
Responsibility to Stakeholders
Implementing a Stakeholder Perspective
 Relationships and Business

Building relationships is one of most important areas

in business today
Stakeholder framework
Helps identify internal and external stakeholders
Helps monitor and respond to needs, values, and
expectations of stakeholder groups
 What Is a Stakeholder?

Customers
Investors
Employees
Suppliers
Government agencies
Communities
 Primary vs. Secondary Stakeholders

Primary stakeholders: Those whose continued

association is necessary for a firms survival

Secondary stakeholders: Are not essential to a

companys survival
 Social Responsibility and Ethics

Social responsibility can be viewed as a contract

with society
Economic
Legal
Ethical
Philanthropic

Business ethics involves carefully thought-out

rules (heuristics) of conduct that guide decision
making
 Corporate Governance

Accountability

Oversight

Control

Shareholder model

Stakeholder model
 Implementing a Stakeholder
Perspective

1. Assessing the corporate culture

2. Identifying stakeholder groups
3. Identifying stakeholder issues
4. Assessing organizational commitment to social
responsibility
5. Identifying resources and determining urgency
6. Gaining stakeholder feedback