A STAKEHOLDER APPROACH

AND BUSINESS ETHICS

Liliana inggrit wijaya
 KEY POINTS
• 1. Why a stakehoder approach to business
ethics?
• 2. Stakeholder analysis defined
• 3. How to execute a stakeholder analysis
• 4. Moral responsibilities of functional area
managers
• 5. Executing a stakeholder analysis as an
observer
• 6. Stakeholder Analysis and ethical reasoning
1. Why a stakehoder approach to
business ethics?
• A method for mapping anad managing the
complex moral relationships between a
corporation’s strategic activities and those who
effect and are affected by such actions
• Stockholder approach focuses on financial and
economic relationships
• Stakeholder approach includes moral,
political,ecological, and human welfare interests
as well as economic factors.
 2. Stakeholder analysis defined
• A framework that enables users to map and then
manage corporate relationships (present and
potential)with groups who affect and are affected
by the corporation’s policies and actions
• One goal of stakeholder analysis from a firm’s
perspective is to create “win-win” situations for
itself and its stakeholder relationships.
• The purposes are identifying and managing
social responsibility roles and relationships
between a company and its constituents/external
groups
• A stake is any interest, share, or claim a
group or individual has in the outcome of a
corporation’s policies, procedures, or
actions toward others.
• A stakeholder is any individual or group
who can affect or is a affected by the
actions, decisions, policies, practices, or
goals of the organization
 Type of stakeholders
• Primary stakeholders, includes
owners/stockholders, customers, employees,
suppliers and board of directors
• Secondary stakeholders, includes all other
interested groups such as the media,
consumers, lobbyists, courts, governments,
competitors, the public and society
• Stakeholders also have stakeholders
 3. How to execute a stakeholder
analysis
• 1. Mapping stakeholder relationships
• 2. Mapping stakeholder coalitions
• 3. Assessing the nature of each stakeholder’s
interest
• 4. Assessing the nature of each stakeholder’s
power
• 5. Constructing a matrix of stakeholder moral
responsibilities
• 6. Developing specific strategies and tactics
• 7. Monitoring shifting coalitions
 OWNERS
POLITICAL FINANCIAL
GROUP COMMUNITY

ACTIVIST
GOVERNMENT
GROUP

SUPPLIERS FIRM CUSTOMERS

ADVOCATE
COMPETITORS
GROUP

TRADE
ASSOCIATIONS
UNIONS

EMPLOYEES
 Step 4: assessing the nature of
each stakeholder’s power
• 1. voting power
• 2. political power
• 3. economic power
Step 5: Stakeholder moral
responsibility matrix
legal economic ethical voluntary
 Who are the most important
stakeholders?
Supervisory Middle Executive
Managers Managers Managers
Customers 5.57 6.10 6.40
Myself 6.28 6.29 6.28
Subordinates 6.06 6.30 6.14
Employees 5.93 6.11 6.01
Boss(es) 5.72 5.92 5.82
Co-Workers 5.87 5.82 5.81
Colleaques 5.66 5.78 5.75
Managers 5.26 5.56 5.75
Owners 4.07 4.51 5.30
General Public 4.38 4.49 4.52
Stockholders 3.35 3.79 4.51
Elected Public Official 3.81 3.54 3.79
Government 3.09 2.05 2.90
4. Moral Responsibilities of Functional Area Managers

OWNERS
POLITICAL FINANCIAL
GROUP COMMUNITY

ACTIVIST
GOVERNMENT
GROUP

SUPPLIERS Managers in a job CUSTOMERS

ADVOCATE
COMPETITORS
GROUP

TRADE
ASSOCIATIONS
UNIONS
EMPLOYEES
 5. Executing a stakeholder
analysis as an observer
• Observer stakeholder outside or inside a
company
• Provides useful information and
perspective toward understanding
strategic political, economic, and moral
relationships
6. Developing specific strategies
and tactics
• First : directly or indirectly
• Second : offensive or defensive
• Third : accommodate, negotiate,
manipulate, resist, avoid, or do
nothing
Finally : combination of strategies
 Stakeholder Analysis and ethical
reasoning
• The stakeholder analysis requires the
focal or principal stakeholders to define
and fulfill their ethical obligations to the
affected constituencies
• end