Essay on Business ethics1

This essay has a total of 1483 words and 6 pages.

business ethics1

As a corporate manager of a publicly held company, one is responsible for the interests of
many different stakeholders. In the past, it has been a very common assumption and
practice that corporate managers of a company should strive to act solely for the benefit
of shareholders, or owners of the company. Corporate managers were trained to take any
actions necessary or use any means possible to improve the bottom line; or profits,
without regard to other “stakeholders”. As a business student at San Diego State, I had
adopted this same “bottom line” philosophy that had been preached to me since the day of
my first business class. I had bought into these teachings so wholeheartedly, that before
this class I really felt the terms “stakeholder” and “shareholder” could be used
interchangeably. However, I was very enlightened by your lecture on February 29th, in
which, you taught us the true definition of a “stakeholder”. It simply boils down to two
crucial yet basic points. A stakeholder is described as, “anyone or anything that can
affect the ability of the corporation to achieve its mission or which is affected by the
corporations activities” (Dunn, 2/29 Lecture). This simple statement encompasses so many
more entities than I had ever thought of in the past. In this paper I will place myself in
the position of a corporate manager of a publicly held, “for profit”, company and discuss
which shareholder’s interests a corporate manager is obligated to represent in the order
of their importance. As a corporate manager, my primary obligation is to shareholders. As
you will see later in this paper, these are not the only stakeholders whose interests
should be represented but they are the most important. Without financing from
shareholders, no corporation can efficiently accomplish their mission and goals. In a
for-profit organization, the shareholders are the people that made the inception of the
corporation possible. They bare all of the risk and put their faith and funds into the
corporation. Before there were customers and employees, there were shareholders with a
vision of a viable and profitable corporation. Because of the risk they bare, the vision
they had, and their ability to create an efficiently functioning corporation, their
interests are number one. However, not to the extent that laws be broken and other
stakeholders’ rights be violated. A great of example of corporate managers doing just that
lies within the Ford Pinto case we went over in class. Consumers’ rights to life were
grossly violated by Ford, solely because they calculated the loss of life to be less
expensive than a recall. This was clearly a case in which managers crossed the line in
upholding their duties to shareholders and would not be condoned within the corporation I
am part of. As long as nothing of that nature takes place, as a manager I have a
deontological duty to my shareholders. Deontology is a principle discussed in lecture and
Rachel’s book I use to support this argument. As corporate manager, I have a deontological
duty to make shareholder’s interests my primary concern. They have an intrinsic right to
be my primary concern since, as I mentioned previously, without the formation and funding
made possible by the shareholders, the corporation wouldn’t even exist. Next in the
pecking order of stakeholder interests I would represent would be the environment. In
these days of the soaring NASDAQ, space shuttle missions, and the internet, it is easy to
forget that the environment is even a stakeholder at all. I have to admit, before this
course I had been guilty of doing just that. After you taught us what constituted a
stakeholder, I was quickly reminded how important the environment is. There are two
primary reasons the environment receives such important representation. First, and most
obvious, at this time as human beings it is all we have to survive off. The delicate
balance and interrelationships of ecosystems must be respected. Thinking short term,
managers commonly forget about the environment because immediate destructive outcomes to
the environment are not always easy to see. This way of doing business must change.
Managers don’t always realize how grand of a scale this is. We have already seen the
harmful effects of o-zone depletion, acid rain, oil spills, etc. Simply because you, as a
manager, and your shareholders won’t be around to be subject to the effects doesn’t make
it right. This is a way of thinking and doing business that must be changed. This argument
is clearly supported by the “Land Ethic” discussed in Rachel’s book and class. Without a
doubt, the environment fits the definition as a stakeholder. And as stated in lecture,
“our responsibility to the environment is inherent, the environment has an intrinsic value
within it”(Dunn, Lecture 2/22). The second reason I represent the environment is based
upon shareholder interests. Any corporation that violates environmental laws because of
short term cost savings is subject to heavy monetary penalties as well as costly clean-ups
if caught. These costs can dramatically effect profits; in turn, shareholder’s returns.
The next stakeholder group that I represent is the consumers. If a corporation doesn’t
have consumers purchasing their goods or services, they won’t be a corporation for long.
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