Long-Term Benefits
• Legal & Financial Security: Ethical behavior reduces the risk of expensive
court cases and government fines.
• Publicity and Loyalty: Ethical policies build positive brand reputation and
consumer loyalty, whereas unethical behavior leads to bad publicity and
long-term sales reductions.
• Business Opportunities: Ethical firms are more likely to be awarded
government contracts and attract a growing demographic of ethical
consumers.
• Human Resources: Socially responsible companies are often better at
attracting well-qualified employees.
Chapter 5
Stakeholders
1.5
5.1 Business Stakeholders
A stakeholder is defined as any
individual or group that can be
affected by, or has an interest in,
Key Term
any action taken by an • Internal Stakeholders:
organization. Individuals or groups who work
within the business or own it.
This includes owners
OWNERS
(shareholders), managers, and
other employees.
MANAGERS
• External Stakeholders:
Individuals or groups separate
from the business but affected
EMPLOYEES by or interested in its
operations. Examples include
customers, suppliers, local
communities, government
agencies, special interest
GOVERNMENT
groups (like pressure groups),
and lenders.
, Stakeholder Roles , Rights and Responsibilities
Roles Rights Responsibilities
Receive
Purchase
goods/services
goods and Be honest; pay for
meeting health,
services; goods/services; do
safety, design, and
provide not steal; do not
Customers performance
revenue for make false claims
standards; receive
business about poor service
compensation/repla
function and or failed items.
cements for failed
expansion.
items as per law.
Supply
Be paid on time per
goods/services as
Supply goods agreements; be
Suppliers ordered and in the
and services. treated fairly and
condition laid down
not exploited.
by contracts.
Be honest; meet
Employment contract
contracts meeting requirements;
Provide labor
legal standards (e.g., cooperate with
services per
Employees minimum wage); fair reasonable
employment
treatment/payment; management
contracts.
freedom to join a requests; observe
trade union. ethical codes of
conduct.
Cooperate with the
Consulted regarding
business regarding
Local Provide labor major changes
expansion and
community services. affecting them (e.g.,
other plans where
expansion plans).
reasonable.
• Legal & Financial Security: Ethical behavior reduces the risk of expensive
court cases and government fines.
• Publicity and Loyalty: Ethical policies build positive brand reputation and
consumer loyalty, whereas unethical behavior leads to bad publicity and
long-term sales reductions.
• Business Opportunities: Ethical firms are more likely to be awarded
government contracts and attract a growing demographic of ethical
consumers.
• Human Resources: Socially responsible companies are often better at
attracting well-qualified employees.
Chapter 5
Stakeholders
1.5
5.1 Business Stakeholders
A stakeholder is defined as any
individual or group that can be
affected by, or has an interest in,
Key Term
any action taken by an • Internal Stakeholders:
organization. Individuals or groups who work
within the business or own it.
This includes owners
OWNERS
(shareholders), managers, and
other employees.
MANAGERS
• External Stakeholders:
Individuals or groups separate
from the business but affected
EMPLOYEES by or interested in its
operations. Examples include
customers, suppliers, local
communities, government
agencies, special interest
GOVERNMENT
groups (like pressure groups),
and lenders.
, Stakeholder Roles , Rights and Responsibilities
Roles Rights Responsibilities
Receive
Purchase
goods/services
goods and Be honest; pay for
meeting health,
services; goods/services; do
safety, design, and
provide not steal; do not
Customers performance
revenue for make false claims
standards; receive
business about poor service
compensation/repla
function and or failed items.
cements for failed
expansion.
items as per law.
Supply
Be paid on time per
goods/services as
Supply goods agreements; be
Suppliers ordered and in the
and services. treated fairly and
condition laid down
not exploited.
by contracts.
Be honest; meet
Employment contract
contracts meeting requirements;
Provide labor
legal standards (e.g., cooperate with
services per
Employees minimum wage); fair reasonable
employment
treatment/payment; management
contracts.
freedom to join a requests; observe
trade union. ethical codes of
conduct.
Cooperate with the
Consulted regarding
business regarding
Local Provide labor major changes
expansion and
community services. affecting them (e.g.,
other plans where
expansion plans).
reasonable.
