CHAPTER ONE

Business Ethics, The

Changing Environment, And
Stakeholder Management
 Figure 1.2:
Five Levels of Business Ethics
 Unethical Business Practices of
Employees

 Showing respect to those who act unethically

 Abusive or intimidating behavior
 Misrepresentation of hours worked or work done
 Lying
 Withholding information
 Accepting personal benefits for business work

 Context issues:
 Large companies—Younger employees and employees
with low tenure in the organization
 Small companies—Boss determines everything
 Ethics and Compliance Programs

 Employees believe that nothing will be done if they report

unethical behavior, or they are unsatisfied with the actions taken
 Only 25% of employees:
 are willing to seek advice about ethics questions that arise;
 feel they are prepared to handle situations that could lead to
misconduct;
 indicate that they are rewarded for ethical behavior;
 report that their company does not reward success obtained through
 questionable means;
 say they feel positively about their company

 Employees feel that reports will not be held confidentially

 FIG. 1. 3
BUSINESS Environmental Dimensions
 Economic Factors
 Increasingly global context for trade, markets,
resources
 Business expansion, product expansion
 Stock & bond market volatility and
interdependency
 The effects of the European Union (currency
exchange, negotiating power, etc.)
 The rise of China and India
 Technological Environment
 Internet and telecommunication innovations
 Change in jobs, financial transactions, market
operations
 Change in business best-practices
 Integration of supply chains
 Access to information

 What privacy and surveillance issues arise for

employers?
 Political Environment
 Rise of global terrorism
 Change in international coalitions (NATO, EU)
 Increased awareness of issues via electronic
technology
 Fall of communism/Soviet Union
 Governmental and Regulatory
Environment
 Constantly changing/updating laws and
procedurepermits, packaging requirements, etc.
 U.S. Financial Regulations,
 EU Anticompetition laws,
 Changing standards for products, processes (e.g.
EU requirements, green and sustainable
 Influence of Russian and Romanian laws on
 Moldova
 Legal Environment
 Parliament & President
 Russia
 E.U.
 Local Government
 ???
 Demographic Environment
 Globalization-competing against products and
people from China, India, Turkey, Chile, U.S.,
Germany
 Workforce diversity-ages, ethnic background,
languages
 Sexual harassment problems
 Discrimination-economic, ethic, gender, age
 Young people leaving-emigration
 Aging workforce
Figure 1.4: Stakeholders
 Secondary Stakeholders
 Local community groups
 Special Interest groups-bankers, real estate owners
 Consumer groups-
 Environmental groups
 Media—TV, Newspaper, Magazines, Internet
 Society-at-large
 NGO groups
 Should managers pay attention to the needs of these groups?
What priority should they have?
Stakeholder Management Approach

 Six Steps to developing win/win strategies:

1. Identify issues, threats, or opportunities

2. Mapping who the stakeholders are
3. Identify their stakes, interests, and power sources
4. Determine who the members of coalitions are or may become
5. Show what each stakeholder’s ethics are and should be
6. Develop collaborative strategies and dialogue