Business ethics is the applied discipline addressing moral features of commercial activities. It reflects the philosophy of business that targets determining the ultimate purpose of the company. If the purpose of the company is to maximize returns of the shareholders then the diverted profits to other activities is a violation of the fiduciary responsibility. Corporate entities are legal entities in most nations and legally entitled to the rights and liabilities due to them. Stakeholders in organizations are a group of individuals who affect or get affected by the organization’s achievements or lack of it. They include customers, employees, shareholders, community, suppliers, management and the government (Cipriani and Weinstein 1).
The government itself is a major stakeholder, and these companies have obligations in upholding laws and regulations. Government, through regulation and legislation, is critical in the representation of stakeholders who might likely lack any voice in the strategic decision process (Goodpaster 58). The government provides agencies that provide necessary legal framework within which a corporation can operate. They include regulatory agencies, institutions of market control and international agencies. The firm does not operate without the involvement of these frameworks and government agencies expecting the management to act in a corporative way with them. It ensures the firm complies with all legal requirements, tax payments and other corporative activates that are sensitive.
Business stakeholders encounter unethical treatment from the management due to financial critics that challenge the ethics of the executives in charge of financial institutions and regulatory body. However, the stakeholders’ theory articulates the view that a business firm should be managed in a way that a balance gets achieved among all interests who bear a substantial relationship to the firm. Thus, including stakeholders. In the New York Times Magazine article, Friedman explains that the duty of the business leaders is to make money while conforming to the societal basic rules and both the law and ethical customs.
Works Cited
Cipriani, Jim, and Alan Weinstein. “Business ethics means doing right for all stakeholders.” American Cities Business Journals 1 April 2011. Web. Retrieved from http://www.bizjournals.com/buffalo/print-edition/2011/04/01/business-ethics-means-doing-right-for.html
Friedman, Milton. (1970). "The Social Responsibility of Business is to Increase its Profits." The New York Times Magazine 13 September 1970. Web. Retrieved from http://highered.mheducation.com/sites/dl/free/0073524697/910345/Appendices.pdf
Goodpaster, Kenneth. “Business Ethics and Stakeholder Analysis.” Business ethics quarterly 1.1 (1991): 53-73. Web. Retrieved from http://www53.homepage.villanova.edu/james.borden/vsb1001/Goodpaster.pdf
