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Stakeholders Who They Are

In: Business and Management

Submitted By rjwsmith88
Words 1288
Pages 6
Phase 1 Individual Project
Uwear, Peninsula Hotel and Threads4U dynamic business situation
By Robert J. Smith
For
INTD670-1401A-01 Theories of Ethics
Instructor Lisa Smart
Colorado Technical University

Table of Contents

Stakeholders3
Ethical Decision-making model4
Ethical Responsibility 4
Response5
The Proposal 6
References 7

Stakeholders

The dynamics and decisions in any given business situation must include consideration of all stakeholders. There can be many stakeholders in and surrounding an organization and not all stakeholders have an equal interest or concern in the organization. Creditors, directors, employees, government, owners, suppliers, unions, and the community all have a stake in an organization, and in the choices that the organization makes. (BusinessDictionary.com 2014) In the scenario given for this individual project some of the stakeholders are mentioned and some are not. Tom, Joe, Bill, Clients, Uwear, Threads4U, Peninsula Hotel, employee’s, their families, competitors, the government and the community all have a stake in the outcome of this scenario. Some stakeholders have little or no control over the choices a company or employee of the company makes, and others like Joe, Bill and Tom can have a major impact on other stakeholder’s interests. Joe, Tom and Bill all have a fiduciary duty to the shareholders/owners of these respective companies. Their choices must reflect good judgment and must stay within legal guidelines. Joe’s job is to secure contracts for Uwear, but he must do so within the parameters that has been set by his company and his management team. Tom has an obligation to the shareholders to maximize profits, as does Bill. The salespeople at Threads4U also have a duty to act with their organizations best interests in mind. In making these decisions these stakeholders must develop and implement a decision making motel within the organization. It is important for all employees to know and understand this model for guidance in their business affairs:

Ethical decision-making model

“Any ethical decision-making model should incorporate the following:

 Clarify the issues prior to taking action. What is meant by this is that one must determine precisely what must be decided, formulate and devise all possible alternatives, and eliminate any illegal or unethical alternatives.  Evaluate all the positive and negative consequences of your actions.
Evaluate the facts and assumptions associated with any decision you make. Are your sources of information credible? Finally, what are the benefits, burdens, or risks to those involved in your decision?
 Decide on a course of action to be taken. What does your conscience tell you about your alternatives? What about worst-case scenarios?
Finally, ask the following questions: Are you treating others as you would want to be treated in the same situation? Are you comfortable with your decision and the reasoning behind it? What if your children or other family members were observing your actions?
 Implement a plan of action. Have a plan, and be able to justify it to others, particularly those most affected by your decisions. Find ways that will provide the most benefits and least amount of risk, based on the actions you take in any given situation.

Hindsight is important to this process as well. Review and evaluate the results. “(Muse Theories of Ethics 2010)
Ethical Responsibility

Ethical responsibility is the duty to follow a morally correct path. (Hearst Communications, Inc. 2014) In the case of Joe, he has an ethical duty to Uwear, to its shareholders, and all the stakeholders involved. Joe must be honest in his communications and actions with his management team and with Bill. Joe needs to demonstrate Integrity in order to gain the trust of others. If taking the case of wine was illegal, he needs to consider his actions and be law abiding. Joe needs to be fair and just in all of his affairs. Bill and Tom must fulfill commitments and keep promises. Business relationships depend on loyalty, honesty, and Leadership. Bill and Tom must exemplify honor and ethics as leaders in their organizations in order to lead by example. They must demonstrate that they care about their employees and the community in order to maintain their trust. (Joephson 2014) As competitors in the market place there is a force that wants to maximize profits at the expense of ethical responsibility, however, overcoming this force takes moral courage, even if it may mean some lost profits.
Response
Joe has to consider all of his choices in this situation. Joe should make a counter offer undercutting Threads4u offer by one to three percent. If he under cuts the Threads4u offer, he must do so with his company’s profit margins in mind, and all the other ramifications that come with that choice. Since this contract covers fifty percent of Joe’s sales area, he needs to secure this contract or lose his job, but to make his decision based merely on his and his family’s needs would be unethical. Joe has a fiduciary duty to all the stakeholders in this situation and undercutting the Threads4u offer may not be an option, even if it means he may lose his job.
I believe, based on the information given, that in order to satisfy all competing ends, Joe needs to use all the tools he has at his disposal to come to an ethical compromise: he can use his personal relationship with Bill,, the companies good track record, and his charm, in order to secure the contract at or a little below what Threads4u has offered. Bill is the key player in this scenario. (problem scenario A ) Bill could discount his relationship with Joe in order to maximize profits for shareholders, but in doing so he would be discounting Uwear’s good track record. Loyalty means a lot in the business world, to discount it for mere profit would be to forgo the friendship with Joe, and maybe future business with Uwear. However Bill owes loyalty to his shareholders also. Bill should consider a reasonably close offer from Joe in order to satisfy these competing ends. Tom should not fire Joe if he fails to secure this contract. Tom owes a duty to Joe, and to his shareholders to keep Joe in place, after all Joe has secured other contracts through his relationship with Bill, and has proven to be an asset to the company. Tom should communicate through Joe’s management team all possible tools in order to empower Joe in this situation.

The Proposal Joe’s best choice needs to be an informed choice. If his management team and Tom has provided him with a bottom line, he needs to reach a compromise between what he can offer and what Bill has told him. Considering the facts given, Joe should propose to his team that his counter offer to Bill be a couple of percentage points below the ten percent. An eight percent offer would take into account Uwear’s good track record, while not completely ignoring the profit margins. The two percent less would amount to about an even counter offer with all factors considered. Joe would support this proposal by pointing out that by losing this contract, the company also loses a big segment of the market, and the word of mouth business Bill may provide in the future. He can also demonstrate that any loss in this contract has been made up for with the other four contracts Joe has secured as the result of his relationship with Bill.

References

BusinessDictionary.com (2014) retrieved from: http://coursebuildercontent.careeredonline.com/Assets/60000/51268.pdf

Joephson, Michael (2014) Business Ethics and Leadership Wordpress

Muse-Theories of Ethics (2010) Approaches to Ethical Decision Making. Career Education Corporation. CTU online study guide.

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