NORTH SOUTH UNIVERSITY

Center of Excellence in Higher Education

PHI401

Demonstration of the Ethical View of a Company According to

Stakeholder Theory
Course: PHI 401, Section: 13

Instructor:
Barrister Afroz Imtiaz [BAI]

Department of History & Philosophy,

North South University

Submitted by:
Jannatul Ferdousi Prity
ID: 1911654630
Semester: Spring2022

Date of Submission: 10.04.22

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 Table of Contents

Serial
Content Page
No.

1 3
Introduction
2 Stakeholder Theories 3-5

3 Ethics and Ethical Theories 5-7

4 What to do for Making Sure Justice? 7

5 Ethical Order 8

6 Influences 9

7 Globalization 10

8 Application and Justification for a Pre-Imagined Company 11

9 E-commerce Industry 12

10 Surveillance Capitalism 12

11 Conclusion 12

12 References 13

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 Introduction

Business decisions are made based on some uncertain

conditions, actions, and circumstances in which moral and ethical issues must be addressed
effectively. The company has the capability to assist our society in eradicating poverty,
establishing education, ensuring sustainability, and so on. Globalization has resulted in
exchanges of economic, social, and political value between persons and organizations, and
occasionally even between individuals without making any bodily contact. In this report, the
demonstration of the ethical point of view of a corporation in accordance with stakeholder theory
will be addressed along with its justification.

Ethical theories should be considered in order to protect both our principles and our environment
for subsequent generations as the limit of globalization is growing everyday and sustainability of
businesses are endangered.

Stakeholder Theories

A stakeholder is one that is associated with the company and has the ability to affect or is
influenced by the firm's operations, goals, and policies. A stakeholder might be someone internal
or external to the company who has a direct or indirect interest for the organization.

For example, Dhaka stock exchange attracts a large number of investors. Assuming a person
invested in a Bangladeshi firm named ‘D Company’ and profited from that stock after a few
days. The individual is then considered a shareholder of D Company.

There are two principles according to Evan and Freeman’s Theory of Stakeholders:

• The principle of corporate rights: It implies that a company cannot violate the rights of
others.

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 • Principle of Corporate Effect: This principle retains corporations accountable since
they exert great power in society and are responsible for their actions that have
some consequences on others

The Stakeholders of the company

Their primary stakeholders of this company are the marketplace sellers. According to the
traditional management paradigm, an organization's stakeholders include its stockholders,
employees, vendors, and customers.

Who are affected by the company’s decisions?

Their decision will have an impact on all stakeholders. If the stakeholder's decision does not pay
off, the shareholders will first suffer a loss. If the company loses money, it will have to dismiss
or cut off some of their employees. Due to a lack of funds, they may purchase less raw materials
from vendors. Finally, they may manufacture fewer products, which will have an impact on the
customer.

For example, in this context, we might claim that the Rana Plaza catastrophe was caused by poor
decision making on the part of the stockholders. As a result, numerous workers were killed or
injured. Their suppliers were also financially harmed as a result of the whole situation. Finally,
the tragedy had an impact on the customers as well.

Decision Making Considering Stakeholder Theory

Stakeholders are individuals or groups who are affected by or have an impact on the operations
and decisions of a firm. According to my perspective, most businesses adhere to the Freedman's
theories of decision making. If we apply the freeman's theory to the setting of Bangladesh, we
can claim that these theories are becoming more popular.

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Consider a digital learning platform, for example. If a worker notices that there is a need for web
design among their target audience, they can easily begin a web design course. It will be helpful
to all parties involved. From the standpoint of Bangladesh, we may argue that Friedman's theory
is a traditional approach. There are now numerous aspects to consider while making a selection.
Money isn't the only thing that matters in business. Businesses must satisfy all of their corporate
social duties in order to grow.

Ethics and Ethical Theories

Ethics is a set of moral principles. They have an impact on how people make choices and live
their lives. Ethics is concerned with what is beneficial for individuals and society (Ethics, 2014).
Ethical Theory denotes a series of rules or standards that assist us in determining what is right
and wrong in any particular situation. These sets of regulations will have an impact on an
organization's employees as well as its aim.

In general, there are two kinds of ethical theories:

1. Normative Ethical Theories

2. Descriptive Ethical Theories

Now, let’s discuss on Discourse and Post-modern Ethics below:

Discourse Ethics:

Its goal is to address ethical issues by establishing norms through rational thought on all relevant
individuals' real-life experiences. Discourse ethics seeks to accomplish two goals: to define ideal
discourse contexts and to establish ethics in the agreements reached via such discourse. Ethics of
Discourse incorporates the belief that if people discuss things honestly and freely, the ultimate
results will be ethically consistent with the law for those who have engaged sufficiently in the
discourse.

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Postmodern Ethics:

Morality is positioned outside of the sphere of reason in an intuitive "moral impulse" among
others, in this theory of morality. Individual performers are urged to question established norms
and standards, as well as to respond to and act on their instincts, inner beliefs, and "emotional
reactions" about what is right and wrong in a specific decision-making circumstance.
Postmodernists believe that truth is relative and are dubious of interpretations that claim to be
accurate for all communities, nations, customs, or ethnicities. It can be seen as a reaction to
efforts to empirically explain reality by claiming that reality is a psychological creation.

Morality

Morality is a set of ideas that allow people to live in societies together. It's what people consider
"right" and "acceptable" in their societies. In order to act morally, one must occasionally set one's
own narrow concerns aside in order to benefit society. Individuals who break these rules may be
considered immoral (Morin, 2020). Every corporation has a set of moral standards. It is regarded
unacceptable when someone performs anything that does not come inside their moral threshold.

Utilitarianism

According to utilitarianism, an action is ethically correct if it provides the greatest amount of

benefit to the greatest number of people affected by the activity. It indicates that a company
should produce the greatest goods or quality goods for the greatest number of people. For
instance, if a shopkeeper lies to make a sale, the consumer will suffer, while the shopkeeper and
his family will benefit from the sale. As a result, it will be regarded as ethically correct.

• Act Utilitarianism: This takes into account the benefits and drawbacks of a particular activity.

• Rule Utilitarianism: This takes into account many types of actions, their long-term
consequences, and their benefits and drawbacks.

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Egoism

The activity will be regarded a good deed if a decision-maker deliberately decides to follow
between their (short-term) goals and their (long-term) benefits. Some activities are encouraged
while others are forbidden in every ethical framework. In this case, ethical egoism says that one
should prioritize his or her own (long-term) self-interest. It also asserts that if having compassion
for others serves our own objectives, we have a moral imperative to cease from doing so. For
example, I had the option of not submitting the assignment, but I opted to do so because I wanted
a good mark.

Making sure Justice (Fair Treatment)

An action is regarded ethical if it achieves basic rights, fair treatment, or equity. In this context,
fair treatment is about everyone will get what they deserves. When a company practices fairness,
it holds all employees to the same standards, regardless of their position. The CEO is held to the
same standards as the entry-level employee in terms of honesty, ethics, and accountability. The
company will treat all of its consumers with regard, providing the same commodities within the
same criteria.

• Fair procedures (Procedural Justice): Procedural justice refers to fairness in the mechanisms
of resolving conflicts and assigning resources. It's a theory that, when put into practice, promotes
positive organizational growth and develops relationships.

For example, all candidates should go through the same employment process in an organization.

• Fair Outcomes (Distributive Justice): Distributive justice is concerned with the equitable
distribution of resources amongst various members of a society. Individuals or groups may
conclude that fairness in distribution has not been attained if some employees perform extra
shifts and yet are paid same.

Finally, we can claim that fair treatment is possible provided fair methods and outcomes are
follow
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 Ethical Order

Employee Duties and Responsibilities

Shareholders aren't generally the same as stakeholders. They could be subjected as capable of
working as employees or workers. A company's employees are in charge of a number of tasks
linked to the firm's management. They must think about what is best for the organization. They
must deal with a range of tasks and obligations as stakeholders.

The following are some of the employees' duties and responsibilities:

• Duty to comply with labor contract:

• Duty to comply with the law
• Duty to respect the employer’s property

Consumer Ethics and Responsibilities

Individuals, corporations, and institutions, which buy or engage into a commitment to purchase
and then use products and services provided by a corporation, are referred to as consumers.
Customers have some rights as consumers from corporations, which are referred to as consumer
rights. In a word, it is a method of running a business in the manner of a monarchial state, with
its own set of conventions, laws, and policies enacted from the top down.

Corporate Governance

Corporate governance refers to how boards of directors monitor the management of a

corporation and how members of the board are held responsible to company and its shareholders.
Corporate governance affects how a firm interacts with its workforce, stockholders, consumers,
and banks. The optimal corporate governance practices and initiatives that the company takes,
helps them to strengthen its corporate governance. Improving corporate governance can benefit
both individual businesses and the country as a whole.

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 Influences

When making any kind of decision, we are frequently impacted by a number of factors. The
following are the elements:

Situational Factors

The decision maker's situation can influence or put an impact on how ethically he or she makes
decisions. It's possible that the scenario has something to do with the problem or the setting.
Moral Sensitivity, Moral Framework, Compensation, Leadership, Bureaucracy Job Functions,
Organizational Culture, and National Orientation are the situational aspects.

For example, D Company's sales manager has set a sales goal for his salesperson. The manager
also issued the salesman an ultimatum, stating that if the salesman did not meet his target, he
would be fired. As a result, in this situation, the salesman may engage in unethical behavior in
terms of meeting his sales objective just to save his profession.

Individual Factors

These parameters are affected by psychological traits that have an impact on a person's thought
process. Every individual's scenario is distinct. These shape a 's thoughts and are usually given to
them from birth, but they can also be shaped by external circumstances such as socializing.
Individuals' age and gender, national and cultural features, education and employment, some
psychological elements, personal beliefs, personal dignity, and moral creativeness are among the
determinants.

In our country, for example, women are viewed as less important than men. Despite the fact that
a male and a female employee work in the same position, the male worker has a larger income
than the female worker.

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 Globalization

Globalization refers to the increasing integration of the global financial system, customs, and
inhabitants as a result of inter trade in goods and services, investment, and technology, as well as
people and data management. Globalization has a significant impact over all stakeholders.

Effect of Globalization on Stakeholders

When a firm goes worldwide, its stockholders have a better chance of making a profit.
Unemployment will be reduced to some extent as a result of globalization. Consumers will
benefit from better prices and products. Globalization will provide a wide market for providers
as well.

Sustainability

Sustainability focuses on the long maintenance tasks based on the environmental, economical,
and social concerns. Sustainability is made up of three parts: economic, social, and
environmental aspects.

Globalization put impact on Sustainability

Sustainability is required in order to reap the benefits of globalization. We need to take a more
environmentally friendly strategy.

 Green jobs are well-paying positions that contribute to environmental conservation or

restoration, whether in traditional industries like manufacturing and infrastructure or in
emerging green industries such as hydropower.
 Job Enlargement: It comprises giving workers additional similar-level responsibilities
in order to increase the number of jobs performed.
 Job Enrichment: It allows an employee to grow in their career, achieve greater success,
and take on more responsibility.

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 Application and Justification

We examined many ethical theories, globalization, stakeholders’ theory, sustainability, morality,

and a variety of other issues in the preceding paragraphs.

It is quite hard to discover an organization in our country that engages in ethical behavior in the
workplace and believes in both sustainability and globalization.

Business and Moral Reasons

Many RMG companies reportedly laid off staff during the period of lockdown, according to
reports on the news. The factories were initially closed during the lockdown, and as a result,
several RMG stockholders opted to lay off their employees without warning. It will be regarded
as unethical behavior. We can classify this as a case of stakeholder theory of Friedman.

Let's say the name of the company is D Company, and it's a well-known RMG. Given the fact
that the employees have families, this company opted not to lay off any of their staff. They even
chose to give the workers their full income at first, but as the closure grew longer, they opted to
lower the workers' salaries in order to stay in the field. They informed me of the reduction ahead
of time. This should be seen as an ethical activity. We can conclude that firm X is not as immoral
as the others based on their activities.

Corporate Citizenship Theory

The responsibility of a company in society is discussed in corporate citizenship theory. Corporate

citizenship has been incorporated throughout every action and decision that D company makes.
They trust that corporate citizenship is reflected through who they are as a company, how
they conduct business, and how they care for the people, as well as how they interact with the
rest of the world.

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 E-Commerce Industry

E-commerce refers to the purchasing and selling products and services, as well as the transfer of
payments or info, over an online platform, most commonly the internet.

D Company basically operates as B2C retailer. The retail aspect of e-commerce over the internet
is known as business-to-consumer (B2C). It occurs when companies sell goods, ideas, or data to
customers directly. The term gained popularity during the period of late 1990s dot-com boom,
when ecommerce websites and dealers of goods were still a phenomenon.

Surveillance Capitalism

Surveillance capitalism aids businesses in developing better products, maintaining efficient

inventories, and providing clients with exactly what they require as quickly as feasible.
Surveillance capitalism creates an unending realm of convenience by precisely locating or
influencing supply and demand. Surveillance capitalism drives corporations to offer customers
anything for the highest possible price. Many businesses, on the other hand, do not or might find
it really difficult to examine whether or not doing so is ethical.

Conclusion

As the following discussions show, ethical values in Bangladeshi businesses differ by industry.
Every business should strive to create and sustain ethical principles that consider all
stakeholders’ interests and their rights. Hence, their perspective will be ethical and finally, those
companies will attain actual globalization and socio-economic sustainability.

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 References

Ethics. (2014). Retrieved from BBC:

https://www.bbc.co.uk/ethics/introduction/intro_1.shtml#top

WPSU - Penn State Public Media. (2022). Ethical Theories. The Arthur W. Page Center.

https://www.pagecentertraining.psu.edu/public-relations-ethics/introduction-to-public-

relations-ethics/lesson-1/ethical-theories/

Chowdhury, O. (2019, October 24). What is Corporate Governance? Principles, Examples &

More. Trade Brains. https://tradebrains.in/corporate-governance/

Rahman, J. (2011). Corporate Governance Practices in Bangladesh | Semantic Scholar.

SEMANTIC SCHOLAR. https://www.semanticscholar.org/paper/Corporate-

Governance-Practices-in-Bangladesh-Rahman-

Hossain/a8c486e184dd99455c01d8bb4d1a4b2f306fa8d5

Chai, W., Holak, B., & Cole, B. (2020, December 15). e-commerce. SearchCIO.

https://www.techtarget.com/searchcio/definition/e-commerce

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