HISTORY OF BUSINESS ETHICS AND STAKEHOLDER

History of Business Ethics and Stakeholder

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HISTORY OF BUSINESS ETHICS AND STAKEHOLDER

As the top supervisor, the CEO is normally in charge of the whole operations of the enterprise

and reports straightforwardly to the administrator and directorate. It is the CEO's obligation to

actualize board choices and activities and to keep up the smooth operation of the firm, with the

help of senior administration. Frequently, the CEO will likewise be assigned as the organization's

leader and will be one of within chiefs on the board (Carter, Ulrich, & Goldsmith, 2005). CEO have

the responsibility of satisfying and supporting various groups that they depend on for their

survival. They tend to ethically balance the owner, stockholder and shareholders interest that

come in the form of profits. They are responsible for balancing shareholder and stakeholder’s

business interest. Stakeholder, as opposed to shareholders, tends to concentrate on a corporate

obligation over corporate profitability (Carter, Ulrich, & Goldsmith, 2005). They believe that an

association ought to endeavor to accomplish fulfillment among all parties involved, instead of

exclusively seeking the highest profits. CEO’s help balance between profits and stakeholder

concerns in the following ways;

(i) They maintain a high-performers leadership panel from stakeholders to the CEO’s

position.

High performing organizations understand that execution happens at the grass roots level. It is

the line directors, chiefs, and center administrators who get things going. In cases where the CEO

doesn't push his or her administration methodology down adequately, it won’t grab hold. Best

organizations create leaders from the bottom up. Senior administrators serve the requirements of

line leaders, similar to an inverse pyramid.

(ii) Focus on market positioning through long-range strategic planning.

HISTORY OF BUSINESS ETHICS AND STAKEHOLDER

The CEO’s together with other management members focus their job abilities in maintaining a

strong market position through long-range strategies such as the offering of after sale services

which attract new customers and at the same time uphold the existing ones. A good example is

where Toyota Car Company offers free car service to their new customers for the first three

months.

(iii) CEO’s encourage the involvement of business in community services and extra

curriculum activities.

Through such activities, the CEO can give back to stakeholders such as the business environment

and community around. Creation of refreshment events such as sports tournaments enables

bonding between the organization and its stakeholders thus improves its commercial activity that

raises profits(Carter, Ulrich, & Goldsmith, 2005).

(iv) The CEO ensures that employees are better propelled and more profitable. They will

make them work with a motivated morale hence aids the business to realize this state

of balance in a much more easy way. A decent reputation makes it less demanding to

recruit workers. Employees might stay longer, reducing the expenses and disturbance

hiring and retraining.

(v) The leader will help the business determine its Social responsibility in the society and

will, therefore, help it to comply with administrative necessities. Activities such as

involvement with the nearby group are perfect chances to produce positive press
HISTORY OF BUSINESS ETHICS AND STAKEHOLDER

coverage hence a marketing strategy. Great associations with nearby powers make

working together easy with the nearby group. Understanding the more extensive

effect of your business can offer one some assistance with developing new items and

administrations. Social responsibility can make you more focused and reduces the

danger of sudden harm to a business reputation. The balance between making profits

and catering for stakeholder’s welfare can thus be achieved easily.

Competition is the rivalry among business organization and premises trying to achieve goals

such as maximizing their profits, increasing market shares, or sales volume by varying the

market mix elements such as price, product, distribution, and promotion. However, some

business premises engage in unfair business practices so as to win a competitive advantage over

their business rivals (Dinwoodie, & Janis, 2011). Examples of unfair competitive practices include

below-cost selling so as to attract more customers since they will be able to pay fewer for the

same product. Selling of counterfeit or imitated products to the customers. Such products are

always of low quality despite them being sold at the same price with original products.

Misleading advertising is another example where a product is advertised to perform qualities it

cannot. The above practices usually reduce the business equality and results to consumer

exploitation and should therefore not be tolerated (Dinwoodie, & Janis, 2011). It’s so unfortunate

that the present market if filled with unfair competition that results to consumer exploitation and

misuse. They end up incurring extra costs. The above practices should be condemned and laws

and regulations laid in place. Individuals fund engaging in such practices should be prosecuted in

a court of law or heavily fined (Horrigan, 2010).

HISTORY OF BUSINESS ETHICS AND STAKEHOLDER

Welfare Capitalism was a methodology that included huge organizations needing to follow some

of their employees choices so they could prevent a strike, maintain a strategic distance from

Union mediation, and keep profitability high. As this began, businesses raised wages, give paid

vacations, give health plans, and they additionally gave after work services to the workers (Hicks,

1999).

Advantages of welfare capitalism

(i) It results to industrial paternalism- welfare capitalism leads to industrial paternalism

which refers to the practice of businesses providing welfare-like services to

employees. It ensures that the employees are treated and handled well by the

organizations.

(ii) It has resulted in the combination of the capitalist economic system with a welfare

state. It has made organization develop a two-fold interest in providing services.

(iii) It has made employees receive benefits from the organization they work for thus

improving their living standards (Hicks, 1999).

Howard Bowen in his book the evolution of social responsibility of businesses predicted that

many if not all business at one pint will tend to recognize its social responsibility in the society.

He predicted that it would reach a point when organizations will strive towards being able to

maintain a good reputation to the public or surrounding environment and at the same time be

able to make profits. The above prediction has come to pass because many businesses

organization are engaging themselves in social activities at a larger rate as compared to the
HISTORY OF BUSINESS ETHICS AND STAKEHOLDER

previous years. This is attributed to the rise in completion levels hence business will go an extra

mile trying to impress their customers. Building a reputation for being a dependable business

separates a business entity from the rest. Organizations frequently support suppliers who have

mindful arrangements. This is because it can positively affect how they are seen by their

customers. Some customers don't just prefer to deal with responsible companies but insist on it

(Horrigan, 2010).
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References

Carter, L., Ulrich, D., & Goldsmith, M. (2005). Best practices in leadership development and

organization change: How the best companies ensure meaningful change and

sustainable leadership. San Francisco: Pfeiffer

Dinwoodie, G. B., & Janis, M. D. (2011). Trademarks and unfair competition: Law and policy:

case and statutory supplement 2011-2012. New York: Wolters Kluwer Law & Business.

Hicks, A. M. (1999). Social democracy & welfare capitalism: A century of income security

politics. Ithaca [u.a.: Cornell Univ. Press.

Horrigan, B. (2010). Corporate social responsibility in the 21st Century: Debates, models, and

practices across government, law, and business. Cheltenham, U.K: Edward Elgar.