Major Ethical Issues You Would Encounter Issues that Have Ethical Implications Ethics and CSR case analysis need double check and rephrase Ethics and CSR

Major Ethical Issues You Would Encounter Issues that Have Ethical Implications Ethics and CSR case analysis need double check and rephrase

Ethics and CSR case analysis need double check and rephrase

Ethics and CSR case analysis need double check and rephrase

the case analysis and materials need to apply please see attach

the case analysis and materials need to apply please see attach

the case analysis and materials need to apply please see attach Running head: ASSIGNMENT
1
Assignment
Instructor name
Student name
Date
ASSIGNMENT
2
The major ethical issues I would like to discuss are health and safety, transparency
and accountability, and fair pricing. Mega Food Company primarily deals in food products.
The health and safety issues are found at Frostburg. The rules and regulations related to the
use of chemicals and pesticides are not strict which can lead to health issues. Proper disposal
of waste and garbage can avoid pollution. The company should focus on transparency and
accountability in its operations. The financial statements should be accessible to outsiders and
investors. Mega Food Company should not overcharge the products which mean the food
items should be fairly charged.
The three issues related to corporate social responsibility are environment protection,
ethical labor practices, and philanthropy. Environmental protection should be the primary
focus of the company. This means the company should take the necessary steps to make sure
that the area is safe and hygiene for the company as well as the community. Fair treatment to
the employees is the prime concern. The company should ensure that all the labor laws are
followed. If the organization decides to relocate to Frostburg then there might be variation in
the labor laws. Philanthropy means giving back to the community. The employees seem to be
loyal to the business. Community programs and charities will not only benefit the local
people but also the farmers from losing their business.
The three major global trends that specifically influence the company to consider
relocation are market, regulations, and labor cost. Market means allowing more options for
the customers to purchase overseas. This can help in earning more revenue. Relocation can
result in fewer regulations. The government official of different countries can have fewer
interferences which will prevent pricing rules and laws. Labor costs will also reduce to a
great extent. The workers are paid $12 per hour in the United States, on the other hand, the
overseas workers are paid $2 per hour. This will have a huge impact on the operating cost of
the company.
ASSIGNMENT
3
The challenges that Mega Food Company may encounter if they relocate are
communication, human resource, and relationship. Communication problems or language
barriers can have a negative impact on the business because employees might not understand
the instructions and work. The cultural differences can result in tension. In overseas
countries, people looking after the administrative work are not sufficient. The responsibility
is delegated and has a flexible line of authority. The company is famous for establishing a
good relationship with the local employees and the employees are also loyal to the business.
However, the profits for the organization will increase but the relationship with the
community will be affected. Moreover, local farmers depend on the revenue from the raw
materials sold to the company.
My official recommendation to Mega Food is not to move the business to overseas.
Relocation will impose following rules and regulations of the country which can lead to
failure or losses. The only benefit of relocation is the lower cost. There is no guarantee that
the company will earn more profits. Rather safety of the community is the major concern
because the company uses pesticides and chemicals which can lead to the customer turning
sick. The local farmers also get affected, who sells raw material to Mega Food.
The additional information that can be helpful is cultural demographics, current
employees, and prospective employees. Cultural demographics include Will the customers
buy the product? Are there any other competitors doing the same business? If there will be
more companies like Mega Foods in that region then it will create a big problem. The
customers will also decline if they do not support non-US productivity. The current
employees are loyal to the business. Are they aware of the job loss due to relocation? Are
they provided with benefits after relocation? Do local farmers know that they may lose their
profits? Prospective employees are those who are likely to join the company after the
relocation. There is no idea about the turnaround average and the loyalty of the employees for
ASSIGNMENT
the organization. There is no guarantee that the productivity will be increased despite the
reduced labor cost. If the organization is not able to have loyal and hardworking employs
then the profit margins are affected.
4
Running head: ASSIGNMENT
1
Assignment
Instructor name
Student name
Date
ASSIGNMENT
2
The major ethical issues I would like to discuss are health and safety, transparency
and accountability, and fair pricing. Mega Food Company primarily deals in food products.
The health and safety issues are found at Frostburg. The rules and regulations related to the
use of chemicals and pesticides are not strict which can lead to health issues. Proper disposal
of waste and garbage can avoid pollution. The company should focus on transparency and
accountability in its operations. The financial statements should be accessible to outsiders and
investors. Mega Food Company should not overcharge the products which mean the food
items should be fairly charged.
The three issues related to corporate social responsibility are environment protection,
ethical labor practices, and philanthropy. Environmental protection should be the primary
focus of the company. This means the company should take the necessary steps to make sure
that the area is safe and hygiene for the company as well as the community. Fair treatment to
the employees is the prime concern. The company should ensure that all the labor laws are
followed. If the organization decides to relocate to Frostburg then there might be variation in
the labor laws. Philanthropy means giving back to the community. The employees seem to be
loyal to the business. Community programs and charities will not only benefit the local
people but also the farmers from losing their business.
The three major global trends that specifically influence the company to consider
relocation are market, regulations, and labor cost. Market means allowing more options for
the customers to purchase overseas. This can help in earning more revenue. Relocation can
result in fewer regulations. The government official of different countries can have fewer
interferences which will prevent pricing rules and laws. Labor costs will also reduce to a
great extent. The workers are paid $12 per hour in the United States, on the other hand, the
overseas workers are paid $2 per hour. This will have a huge impact on the operating cost of
the company.
ASSIGNMENT
3
The challenges that Mega Food Company may encounter if they relocate are
communication, human resource, and relationship. Communication problems or language
barriers can have a negative impact on the business because employees might not understand
the instructions and work. The cultural differences can result in tension. In overseas
countries, people looking after the administrative work are not sufficient. The responsibility
is delegated and has a flexible line of authority. The company is famous for establishing a
good relationship with the local employees and the employees are also loyal to the business.
However, the profits for the organization will increase but the relationship with the
community will be affected. Moreover, local farmers depend on the revenue from the raw
materials sold to the company.
My official recommendation to Mega Food is not to move the business to overseas.
Relocation will impose following rules and regulations of the country which can lead to
failure or losses. The only benefit of relocation is the lower cost. There is no guarantee that
the company will earn more profits. Rather safety of the community is the major concern
because the company uses pesticides and chemicals which can lead to the customer turning
sick. The local farmers also get affected, who sells raw material to Mega Food.
The additional information that can be helpful is cultural demographics, current
employees, and prospective employees. Cultural demographics include Will the customers
buy the product? Are there any other competitors doing the same business? If there will be
more companies like Mega Foods in that region then it will create a big problem. The
customers will also decline if they do not support non-US productivity. The current
employees are loyal to the business. Are they aware of the job loss due to relocation? Are
they provided with benefits after relocation? Do local farmers know that they may lose their
profits? Prospective employees are those who are likely to join the company after the
relocation. There is no idea about the turnaround average and the loyalty of the employees for
ASSIGNMENT
the organization. There is no guarantee that the productivity will be increased despite the
reduced labor cost. If the organization is not able to have loyal and hardworking employs
then the profit margins are affected.
4
“But it is the test of an organization that it make ordinary
human beings better than they are capable of…
…requires that the focus be on the strengths of a man –
on what he can do rather than on what he cannot do.
What is necessary to produce the proper spirit in
management must therefore be morality.
…all the organizations in human history that have
achieved greatness of spirit have done so through a
code of practices.”
Peter Drucker (1954) The Practice of Management
“Leadership is of utmost
importance, Indeed there is no
substitute for it. But leadership
cannot be created or promoted.
It cannot be taught or learned.”
Peter Drucker (1954) The Practice of Management
“The first systematic book on
leadership: the Kyropaidaia of
Xenophon – himself no mean
leader of men – is still the best
book on the subject.”
Peter Drucker (1954) The Practice of Management
“But management cannot
create leaders. it can only
create the conditions under
which potential leadership
qualities become effective; or it
can stifle potential leadership.”
Peter Drucker (1954) The Practice of Management
“The supply of leadership is much too
limited and unpredictable to be
depended upon for the creation of the
spirit the business enterprise needs to
be productive and to hold together.
Management must work on creating
the spirit by other means.”
Peter Drucker (1954) The Practice of Management
“These Means may be less effective
and more pedestrian. But at least they
are available and within
management’s control. In fact, to
concentrate on leadership may only
too easily lead management to do
nothing at all about the spirit of its
organization.”
Peter Drucker (1954) The Practice of Management
” Academy of Management Review
1997, Vol. 22, No. 4, 853-886.
TOWARD A THEORY OF STAKEHOLDER
IDENTIFICATION AND SALIENCE: DEFINING THE
PRINCIPLE OF WHO AND WHAT REALLY COUNTS
RONALD K. MITCHELL
University of Victoria
BRADLEY R. AGLE
DONNA J. WOOD
University of Pittsburgh
Stakeholder theory has been a popular heuristic for describing the
management environment for years, but it has not attained full theoretical status. Our aim in this article is to contribute to a theory of
stakeholder identification and salience based on stakeholders possessing one or more of three relationship attributes: power, legitimacy, and urgency. By conibining these attributes, we generate a
typology of stakeholders, propositions concerning their salience to
managers of the firm, and research and management implications.
Since Freeman (1984) published his landmark book. Strategic Management: A Stakeholder Approach, the concept oí “stakeholders” has become embedded in management scholarship and in managers’ thinking.
Yet, as popular as the term has become and as richly descriptive as it is,
there is no agreement on what Freeman (1994) calls “The Principle oí Who
or What Really Counts.” That is, who (or what) are the stakeholders of the
firm? And to whom (or what) do managers pay attention? The first question calls for a normaiive iheory of stakeholder identiiication, to explain
logically why managers should consider certain classes oí entities as
stakeholders. The second question calls for a descriptive theory oí stakeholder salience, to explain the conditions under which managers do consider certain classes of entities as stakeholders.
Stakeholder theory, reviewed in this article, oífers a maddening variety oí signals on how questions oí stakeholder identification might be
answered. We will see stakeholders identified as primary or secondary
We thank the members of {he Second Toronto Conference on Stakeholder Theory, sponsored by the Clarkson Centre for Business Ethics at the University ol Toronto, where the
centrality of these three attributes to a theory of stakeholder-manager relationships was first
noted. We also recognize the contribution of various working groups in SIM and lABS and are
grateful for the comments provided by A. R. Eîangoven and Barry Mitnick, the intellectual
and financial support of Fritz Faulhaber, and the valuable insights of the consulting editor
and the anonymous reviewers.
853
854
Academy oí Management Review
October
stakeholders; as owners and nonowners of the firm; as owners of capital
or owners of less tangible assets; as actors or those acted upon; as those
existing in a voluntary or an involuntary relationship with the firm; as
rights-holders, contractors, or moral claimants; as resource providers to or
dependents of the firm; as risk-takers or influencers; and as legal principals to whom agent-managers bear a fiduciary duty. In the stakeholder
literature there are a few broad definitions that attempt to specify the
empirical reality that virtually anyone can affect or be affected by an
organization’s actions. What is needed is a theory of stakeholder identification that can reliably separate stakeholders from nonstakeholders.
Also in the stakeholder literature are a number of narrow definitions
that attempt to specify the pragmatic reality that managers simply cannot
attend to all actual or potential claims, and that propose a variety of
priorities for managerial attention. In this article we suggest that the
question of stakeholder salience—the degree to which managers give
priority to competing stakeholder claims—goes beyond the question of
stakeholder identification, because the dynamics inherent in each relationship involve complex considerations that are not readily explained by
the stakeholder framework as it currently stands. What is needed also is
a theory of stakeholder salience that can explain to whom and to what
managers actually pay attention.
Among the various ways of identifying stakeholders, as well as in the
agency, behavioral, ecological, institutional, resource dependence, and
transaction cost theories of the firm, we have found no single attribute
within a given theory that can guide us reliably on these issues. However,
we find that one can extract from these literatures the idea that just a few
attributes can be used to identify different classes of stakeholders in a
firm’s environment. We begin our analysis with Freeman’s definition of
stakeholder—”any group or individual who can affect or is affected by the
achievement of the organization’s objectives” (1984: 46)—and develop a
theory of stakeholder identification drawn from these various theoretical
literatures. We start with a broad definition so that no stakeholders, potential or actual, are excluded from analysis arbitrarily or a priori. We
then propose that classes of stakeholders can be identified by their possession or attributed possession of one, two, or all three of the following
attributes: {1} the stakeholder’s power to influence the firm, (2) the Jegiiimacy of the stakeholder’s relationship with the firm, and (3) the urgency of
the stakeholder’s claim on the firm. This theory produces a comprehensive
typology of stakeholders based on the normative assumption that these
variables define the field of stakeholders: those entities to whom managers should pay attention.
Building upon this typology, we further propose a theory of stakeholder salience. In this theory we suggest a dynamic model, based upon
the identification typology, that permits the explicit recognition of situational uniqueness and managerial perception to explain how managers
prioritize stakeholder relationships. We demonstrate how the identifica-
1997
Mitchell, Agle, and Wood
855
tion typology allows predictions to be made about managerial behavior
with respect to each class of stakeholder, as well as predictions about
how stakeholders change from one class to another and what this means
to managers. In the theory oí stakeholder salience, we do not argue that
managers should pay attention to this or that class of stakeholders.
Rather, we argue that to achieve certain ends, or because of perceptual
factors, managers do pay certain kinds of attention to certain kinds of
stakeholders. Knowing what types of stakeholders actually exist, which
our identification typology facilitates, and why managers respond to them
the way they do, which our notion of salience clarifies, sets the stage for
future work in stakeholder theory that specifies how and under what
circumstances managers can and should respond to various stakeholder
types.
The argument proceeds as follows. First, we review the stakeholder
literature, laying out the various explicit and implicit positions on “The
Principle of Who or What Really Counts.” We then present our defense of
the three key attributes—power, legitimacy, and urgency—as identifiers
of stakeholder classes and briefly examine the major organizational theories to discern how they handle these three crucial variables. Next we
introduce managers and salience into the discussion and present our
analysis of the stakeholder classes that result from possession of one, two,
or three of these attributes, giving special attention to the managerial
implications of the existence and salience of each stakeholder class. Finally, we further illustrate the theory’s dynamic qualities by showing how
stakeholders can shift from one class to another, with important consequences for managers and the firm itself, and we explore the research
questions and directions that emerge from the theory.
STAKEHOLDER THEORY—STATE OF THE ART
For more than a decade the stakeholder approach to understanding
the firm in its environment has been a powerful heuristic device, intended
to broaden management’s vision of its roles and responsibilities beyond
the profit maximization function to include interests and claims of nonstockholding groups. Stakeholder theory, in contrast, attempts to articulate a fundamental question in a systematic way: which groups are stakeholders deserving or requiring management attention, and which are not?
In this section we examine how scholars have so far answered these
central questions. Who is a stakeholder, and what is a stake? What does
stakeholder theory offer that is not found in other theories of the firm?
Who Is a Stakeholder, and What Is a Stake?
There is not much disagreement on what kind of entity can be a
stakeholder. Persons, groups, neighborhoods, organizations, institutions,
societies, and even the natural environment are generally thought to
qualify as actual or potential stakeholders. We find that it is the view
856
Academy oí Management Review
October
taken about the existence and nature of the stake that presents an area of
argument, because it is upon the basis of “stake” that “what counts” is
ultimately decided.
Early vagueness in definition. In an early statement Jones defined
corporate social responsibility as “the notion that corporations have an
obligation to constituent groups in society other than stockh…
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