Business Ethics And Stakeholder Management For Your SLP

Business Ethics And Stakeholder Managementfor Your Slp This Session Yo

Review four articles on business ethics from the TLC Library, one each in Modules 1 through 4. In the final module, integrate insights from your reviews. The current assignment involves analyzing stakeholder management concepts in a scenario involving a garment manufacturing company considering off-shoring its production. You will summarize key points from your reading and perform a stakeholder analysis, identifying the primary and secondary stakeholders affected by the decision, their potential benefits or impacts, and their power relative to the organization. Based on your analysis, you will provide a recommendation regarding the company's strategic decision to off-shore manufacturing to maximize profits while considering ethical implications and stakeholder interests.

Paper For Above instruction

The concepts of business ethics and stakeholder management are intricately connected in the context of strategic decision-making within organizations. Business ethics involves the principles and standards that guide behavior in the corporate environment, emphasizing honesty, fairness, and responsibility (Crane & Matten, 2016). Stakeholder management, on the other hand, focuses on identifying, understanding, and balancing the interests of all parties affected by business decisions (Freeman, 1984). An integrative approach ensures that companies not only pursue profitability but also uphold ethical standards that respect stakeholder rights, fostering long-term sustainability and corporate social responsibility (Porter & Kramer, 2006).

When organizations contemplate strategic changes such as off-shoring manufacturing, they face ethical dilemmas concerning economic efficiency versus social responsibility. The literature highlights that effective stakeholder management requires careful analysis of the stakeholders' power, legitimacy, and urgency—attributes that influence their ability to affect or be affected by corporate actions (Mitchell, Agle, & Wood, 1997). Understanding these dynamics helps organizations navigate conflicts between profit motives and societal expectations, maintaining their ethical integrity while achieving business objectives.

The scenario involves a U.S.-based garment company with 980 employees, primarily in small rural communities, considering off-shoring production to a lower-wage country. This decision aims to reduce costs significantly, estimated at a third per unit, translating into substantial profit increases. The company has historically marketed its apparel as “Made in the USA” and cultivated a loyal customer base aligned with patriotic and quality-conscious values. The proposal to discontinue the “Made in the USA” marketing campaign and shift production overseas introduces a complex stakeholder landscape.

Identifying key stakeholders is crucial. First, primary stakeholders include the company's employees, especially those in rural communities who are directly affected by potential job loss or wage reductions. These employees hold significant legitimacy and some level of urgency given their dependency on the company's employment. The management and shareholders are also primary stakeholders; they are focused on profitability and shareholder value, possessing considerable power to influence strategic decisions (Wheelen & Hunger, 2012).

Secondary stakeholders comprise customers, suppliers, community members, unions, and government agencies. Customers who value American-made products and brand loyalty may feel betrayed or disappointed if the company shifts its manufacturing abroad, impacting brand reputation. Suppliers may face disruptions or loss of business if shifts occur. Community members, especially in rural areas, could experience economic decline due to unemployment. The unionized workers, although currently in amicable relations with management, may oppose off-shoring if it threatens job security. Government agencies might scrutinize or regulate the off-shoring process, especially if it involves ethical concerns or violates trade standards.

The power dynamics among stakeholders vary. Employees and unions possess legitimacy and urgency but may lack sufficient power to halt the decision without external support. Shareholders and management wield considerable power, driven by profit motives—this influences the decision-making process significantly. Customers' power depends on their loyalty and willingness to support ethical alternatives. Community stakeholders may mobilize opposition or influence corporate reputation through public opinion.

From an ethical standpoint, the company faces a dilemma: prioritize short-term profits through off-shoring or uphold its brand identity and social responsibility by maintaining domestic manufacturing. An ethical approach suggests considering the broader implications of the decision, including the potential harm to vulnerable communities and the company's reputation for ethical standards (Singer, 2011). Transparency and stakeholder engagement are vital; ethically, companies should communicate openly and involve stakeholders in decision-making, thereby fostering trust and social legitimacy.

Based on this analysis, the recommendation is for the company to adopt a balanced approach. While capitalizing on cost savings may seem financially advantageous, ethical considerations warrant a reevaluation of off-shoring plans. The company might explore alternatives such as gradual transition, offering retraining or relocation assistance to affected employees, or investing in brand differentiation that emphasizes corporate social responsibility. Maintaining domestic production reflects ethical commitments and enhances brand loyalty among ethically conscious consumers. Moreover, engaging stakeholders in dialogue and decision-making aligns with ethical stakeholder management principles, potentially mitigating backlash and preserving long-term organizational sustainability.

References

• Crane, A., & Matten, D. (2016). Business ethics (4th ed.). Oxford University Press.
• Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.
• Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853-886.
• Porter, M. E., & Kramer, M. R. (2006). Strategy & society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78-92.
• Singer, P. (2011). Practical ethics. Cambridge University Press.
• Wheelen, T. L., & Hunger, J. D. (2012). Strategic management and business policy: Toward global sustainability (13th ed.). Pearson.