TABLE 5.6 MORAL STANDARDS APPROACH

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Transcript TABLE 5.6 MORAL STANDARDS APPROACH

FIGURE 5.1
MAP OF CORPORATE STAKEHOLDER ACCOUNTABILITY
Shareholders:
Current, Future,
Ethical …
Activists
Governments
Creditors
Lenders
Employees
Corporation
Customers
Suppliers
Others, including the Media, who can be
affected by or who can affect the achievement
of the corporation’s objectives
TABLE 5.1
FUNDAMENTAL INTERESTS OF STAKEHOLDERS
Well-offness
The proposed decision should result in more
benefits than costs.
Fairness
The distribution of benefits and burdens should
be fair.
Right
The proposed decision should not offend the rights
of the stakeholders and the decision maker.
All three interests must be satisfied for a decision to be considered ethical.
TABLE 5.2
COST-BENEFIT ANALYSIS: SHORT- AND LONG-TERM PROFIT IMPACT
POLLUTION CONTROL
EQUIPMENT
IMPACT ON PROFIT
ShortTerm
Benefits (Present Valued at 10 percent)
Reduction in worker health costs
LongTerm
Total
$500,000
$500,000
$200,000
UNIVERSITY ADMISSION
SCHOLARSHIPS
IMPACT ON PROFIT
ShortTerm
LongTerm
Total
$600,000
$600,000
$600,000
$600,000
$200,000
Increase in worker productivity
Improvement in level of earnings of
scholarship recipients
Total benefits
$200,000
$500,000
$700,000
Costs (Present valued at 10 percent)
Pollution equipment
$350,000
$350,000
Scholarships paid
Total costs
Net benefit-costs
$350,000
($150,000)
$500,000
$400,000
$400,000
$350,000
$400,000
$400,000
$350,000
($400,000)
$600,000
$200,000
FIGURE 5.2
STAKEHOLDER IDENTIFICATION AND INTERESTS
POWER
LEGITIMACY
Dynamic
Influence
URGENCY
SOURCES: Mitchell, Agle and Wood, 1997; Rowley, 1997.
TABLE 5.4
APPROACHES TO THE MEASUREMENT OF
QUANTIFIABLE IMPACTS OF PROPOSED DECISIONS*
A. Profit or loss only
B.
A. plus externalities,
(i.e. Cost-Benefit Analysis/CBA)
C. B. plus probabilities of outcomes,
(i.e. Risk-Benefit Analysis/RBA)
D. CBA or RBA plus ranking of stakeholders
*Optimal decisions usually result from the most thorough approach.
TABLE 5.4
STAKEHOLDER RIGHTS
Life
Health and safety
Fair treatment
Exercise of conscience
Dignity and privacy
Freedom of speech
TABLE 5.5
5-QUESTION APPROACH TO ETHICAL DECISION MAKING
The following 5 questions are asked about a proposed decision:
IS THE DECISION
STAKEHOLDER INTEREST EXAMINED
1. profitable?
Shareholders’–usually short-term
2. legal?
Society at large–legally enforceable rights
3. fair?
Fairness for all
4. right?
Other rights of all
5. going to further
sustainable development?
Specific rights
Question 5 is an optional question designed to focus the decision-making
process on a particular issue of relevance to the organization(s) or decision
maker involved.
TABLE 5.6
MORAL STANDARDS APPROACH TO ETHICAL DECISION MAKING*
MORAL STANDARD
Utilitarian:
Maximize net benefit to
society as a whole
Individual rights:
Respect and protect
Justice:
Fair distribution of
benefits and burdens
QUESTION OF PROPOSED DECISION
Does the action maximize social benefits
and minimize social injuries?
Is the action consistent with
each person's rights?
Will the action lead to a just distribution
of benefits and burdens?
*All three moral standards must be applied; none is a sufficient test by itself.
TABLE 5.7
PASTIN'S APPROACH TO STAKEHOLDER IMPACT ANALYSIS
KEY ASPECT
PURPOSE FOR EXAMINATION
Ground rule ethics
To illuminate an organization's and/or
an individual's rules and values
End-point ethics
To determine the greatest net good
for all concerned
Rule ethics
Social contract ethics
To determine what boundaries a person
or organization should take into account
according to ethical principles
To determine how to move the boundaries
to remove concerns or conflicts