What are the

assessment of non
quantifiable impact?

Fairness among stakeholders

A decision will be considered unethical Fairness is evidenced by a relatively even

unless it is seen to be fair to all distribution of the benefits and burdens
stakeholders. springing from a decision.
 What are the
assessment of non
quantifiable impact?

Rights of stakeholders

Decision considered as ethical if the impacts do The stakeholders rights involve life, health &
not involve the stakeholders’ rights & the rights safety, fair treament, exercise of conscience,
of the person making the decision dignity & privacy, freedom of speech
 STAKEHOLDER ANALYSIS
Modern corporations are now accountable to shareholders and to non-shareholder groups,
both of which form the set of stakeholders to which a company responds.

Freeman (1984) : A stakeholder is anyone who is affected by or can affect the objectives
of the organization.

It has become evident that a company cannot reach its full potential, if it losses the
support of one of the stakeholders.
MAP OF CORPORATE STAKEHOLDER
ACCOUNTABILITY
 STAKEHOLDER ANALYSIS
Modern corporations found out that their Usually, the maximization of profit in a longer
shareholders are made up of persons and than one-year time frame requires harmonious
institutional investors who are interested in longer- relationships with most stakeholder groups and
term time horizons and in how ethically business is their interests.
conducted.

Corporations found out that in the past, they

Ethical investors and many other investors, as
were legally and practically accountable to
well as stakeholder groups, believe in managing
shareholders, but they are also becoming
the corporation on a broader basis than short-
increasingly accountable to stakeholders.
term profit only.
Steps towards an Ethical Decision
1. Determine 2. Define the ethical
the facts -4W, issue(s)
1H

3. Identify major 4. Specify

principles, rules & alternatives
values

5. Compare values 6. 7. Make your

Asses the
& alternatives consequences decision
 Steps towards an Ethical Decision
8. Proposed 12. Better
13.
decision/ Final Decision
Alternative?
action

9. 11. Ethical Analysis

Identify facts  Rank interests in importance.
 Apply comprehensive EDM Framework
 using a philosophical approach
 Consequentialism
 Deontology
 Virtue Ethics and/or
10.
Identify stakeholders;
their interest & ethical Stakeholder Impact Assessment
issues Plus Gap Analysis of motivation; virtues and
character traits
 EMPLOYEE RIGHTS
Rights of individual workers are worthy compare to the employer.

Employees cannot
Employees cannot be
be fired based on
hired based on or even
emotional whim or
questioned on family
personal bias
status, religion, sexual
preference

Sexual Protection of employees by

discrimination referring to legal statutes
cases or regulations
 PRIVACY AND DIGNITY
To have privacy for workers at the work place and ensure worker’s dignity is being
protected against any issues such as:-

Testing for substance

surveillance camera in the abuse such as drug and
washroom alcohol testing, computer
games

Notification and consent Civil work environment:

(where employees have time Harrasment improper uncivil: shouting,
to deliberate, free choice, behaviour that is offensive slamming doors, throwing
adequate information) objects
 JANUARY 2018
PART A (QUESTION 1)

(b) Determine whether Milton Friedman would agree

with the treatment of Steel Bhd towards its employees However, businesses must also consider the following THREE (3) exception of profit-making

Profit would not decline just
No, Milton Friedman would not agree with the practice because the company
of the company of neglecting the welfare, health and concentrates on taking care of
safety aspect of its employees. Friedman proposed its employees’ welfare, health
businesses can make profit as how they wish. and safety
Profit is only a single In making profit, the
measure of performance expected performance must
and it does not reflect the be within the law and
overall reality ethical custom
 JANUARY 2018
PART A (QUESTION 2)

(d) Using the 3-Questions Approach (well-offness, fairness and rights), evaluate the ethicality
of Mr. Que’s instruction to Medina to not making any provisions on the company’s slow
moving stock for the year.
 What to test?
Is Mr. Que’s instruction not to make the
provision on slow moving stock would
result in more benefits than the burdens
to stakeholders?
Is Mr. Que’s instruction not to make the
provision on slow moving stock is fair to
stakeholders?
Is Mr. Que’s instruction not to make the
provision on slow moving stock offended
any rights of the stakeholders?
Explanation Ethical/Not Ethical?
• yes, Mr. Que’s instruction not to make the provision on slow moving Not Ethical as it brings more
stock would result in more benefits than the burdens to stakeholders. burden than the benefits.
• the practice would positively impact a better profit figures in the
income statement.
• long run: such a treatment will bring more burdens than benefit
• Mr. Que’s instruction not to make the provision on slow moving Not Ethical as it is an unfair
stock is NOT fair to many stakeholders, including him. practice to many.
• is not sincere to himself in carrying out his responsibility.
Yes, Mr. Que’s instruction not to make a provision on slow moving Not Ethical as the rights of
stock has offended the rights of many stakeholders stakeholders is offended by
such instruction.
 JANUARY 2018
PART B (QUESTION 2)
(d) Discuss TWO (2) advantages of practicing fair treatment at workplace to both employer and
employee.
Fair treatment will boost
positive attitude towards
employees and they will
definitely give their all
towards the best of
organization. This will
result in a better
performance of the
business.
Fair treatment will
enhance the relationship Fair treatment also
between employer and
prevents the negativity
employees. By having a
feelings of employees
good employer-
towards employers such
employees relationship, it
as feeling down due to
will create a better
discrimination which
understanding on jobs
would affect the quality
cope, platform of
of work done.
cooperation and
commitment.