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Ethics Digest STAKEHOLDER RESPONSIBILITIES Despite
the variety of stakeholder groups and their demands, corporate
social responsibilities can be classified into four broad
categories: (1) economic, (2) legal, (3) ethical, and (4)
discretionary responsibilities (Carroll 1979).
Corporate citizenship can therefore be defined as the
extent to which businesses meet the responsibilities imposed
by their various stakeholders. As society=s
economic agents, businesses are expected to (1) generate and
sustain profitability, (2) offer goods and services that are
both desired and desirable in society, and (3) reward
employees and other agents who help create success.
To satisfy these expectations, businesses develop
strategies to keep abreast of changing customer needs, to
compensate employees and investors fairly, and to continually
improve the efficiency of organizational processes. A
long-term perspective is essential when establishing these
strategies: A responsible business must continue to earn
profits from its ongoing business in order to benefit its
stakeholders. Regardless
of their economic achievements, businesses must abide by
established laws and regulations in order to be good citizens.
Because training all the members of an organization as lawyers
is impossible, the identification of legal issues and
implementation of compliance training is the best approach to
preventing violations and costly litigation.
The establishment of strict ethical standards in the
workplace may also be an excellent way to prevent legal
violations by creating a focus on integrity in decision
making. In
addition, an organization guided by strong ethical values may
also be better able to satisfy ethical responsibilities, the
third type of responsibility imposed by stakeholders.
Two main types of ethical issues are likely to emerge
in an organizational context:
(1) decisions in so-called Agray@ areas
in which the right decision is debatable and (2) decisions in
which the right course of action is clear, but individual and
organizational pressures propel even well-intended managers in
the wrong direction. A
proactive corporate citizen develops precise guidelines that
help organizational members deal with such pressures by
stressing the importance of stakeholders=
viewpoints relative to organizational achievements. In addition to meeting economic, legal, and ethical responsibilities, businesses are also expected to display a genuine concern for the general welfare of all constituencies. For example, society desires a cleaner environment, the preservation of wildlife and their habitats, as well as living wages for employees, but it also demands low-priced products. Companies must balance the costs of these discretionary activities against the costs of manufacturing and marketing their products in a responsible manner.
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