Ethical Theories & Stakeholders Essay Example | Topics and Well Written Essays - 1750 words

Ethical Theories & Stakeholders - Essay Example An organization exists in the society, for the society and cannot have an existence independent of the society. Moreover, the organization has responsibility towards all the stakeholders that are directly or indirectly affected by the conduct of the organization or the employees (Joyce, 2005). Problem statement Top management involvement is essential to build a strong ethical culture within an organization (Clement, 2006). The issues before Veronica are to ascertain if the company policy permits action against such issues. Besides, as a director, she has responsibility towards the stakeholders. She is also morally bound by duty to act in the interest of the maximum number of people. If the demands of the shareholders, stakeholders, consumers and the investors are not met, it can adversely affect the brand image, customer retention, and overall business (Robinson, 2002). Ethical theories & Stakeholders The stakeholders The stakeholder theory holds that managers are obliged to serve al l those who have a â€Å"stake† in the firm (Marcoux, 2000). Initially the stakeholders included the Big Five – the employees, the owner or the shareholders, the customers, suppliers and the community in which the firm operated. The other twin stakeholders include the government (who has the responsibility to ensure that the firm complies with all regulations) and the competitors (who keep the company conscious of the developments and help avoid unethical business practices. The purpose of the firm itself is to serve and coordinate the interests of all the stakeholders (Joyce, 2005). Great Builds is a multinational engineering company and has to ensure that the interest of all the stakeholders is taken care of. Employees are the greatest stakeholders as they constitute the firm and contribute to the firm. Employees have the fundamental right to liberty and safety within the workplace (Greenwood & Cleri, 2005). Customers are only interested in reliable supply of goods a nd services but more recently they have become conscious of dealing with ethical firms. The suppliers demand timely payments and long-term relationships and the community expects safety and security. In the case of Great Builds the most affected by unethical practices would be the employees, the customers and the shareholders. The competitors could be positively affected if the performance of Great Builds suffers as a result of the CEO’s behaviour. Categorical Imperative According to Immanuel Kant duties cannot be associated with self-interest or rewards and payoffs (Carrigan, Maronova & Szmigin, 2006). Moral requirements are based on a standard of rationality known as â€Å"Categorical Imperative†. However, chances are these standards are desire-based on instrumental principles of rationality (Stanford, 2004). The moral philosophy goes beyond that of a human slave to passions. Kant emphasizes that there is a self-governing reason in each individual which guides the pe rson in a rationale decision-making process. There has to be motivation by duty or motivation by respect for law that governs actions. Thus, Kant states that the fundamental principle of our moral duties is a categorical imperative. The word imperative urges us to act in a particular way. The Categorical Imperative is derived from two maxims – objectivity and respect for all persons (Kitcher, 2004). The maxim of objectivity states that the act is right if