Stakeholders and Ethics - Essay Sample

Introduction

Stakeholders are groups and individuals who are affected by the operations of the organizations. Stake in itself means having an interest or a claim in business enterprise. People with a stake in the firm's operations are customers, shareholders, employees, suppliers, governments, trade associations and professionals, environmental and social activists, and non-governmental organizations. (Lawrence & Weber, 2014). Stakeholders can be classified as either market or non-market stakeholders. They both have interests and powers in their sphere of operation.

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Unique Relationship

There exists a unique relationship between the stakeholders and their organizations, which managers accordingly respond to. The interest of shareholders comprises of the stake of each group. Shareholders are interested in ownership of the firm. Their expectation is receiving dividends as a form of their investment exchange and appreciation in capital over time. Customers' interest is to gain fair exchange for the quality and money spent in purchasing services and goods. Suppliers expect to obtain profitable orders, efficient capacity use, building relationships that are stable between the business and customers. Receiving skills development and equity in compensation are among the employee's interests exchanging it with their effort and time. There is a relationship between the public interest groups, local communities, government, and the company. They tend to focus on environmental protection, assurance of human rights, and broader social interests’ advancements.

Stakeholder’s Interests

The stakeholder’s interests that were served by Chiquita include environmental protection, risk minimization, employees received mandated benefits such as protection, safe and comfortable working environment from the attacks by the paramilitary soldiers. (Lawrence & Weber, 2014). The following stakeholders’ interests were not met by paying the paramilitary soldiers: lack of dividend payments, repayment of loans, debt collections and interests, risk minimization, social value protection, and raising revenue through taxes. All money was channeled to paramilitary groups.

It was unethical for the company to pay for the paramilitary group. The application of ethics theories, i.e., virtue, utilities, justice, and rights, resulted in a no response from the ethical analysis.

Virtue as a method of ethics deals with character possessed by a good person. Utility refers to the good that an action or decision produces. It offers a comparison between the cost and decision benefits, action, and policy. Right refers to entitlement to a certain treatment, including the right to safety, life, free speech, being informed, freedom, property, and due process. Denial of such rights or failure of protection to groups and persons is said to be unethical. From Chiquita's case, not all these rights were met. The existence of justice results from equitable distribution of burdens and benefits concerning rules accepted. (Lawrence & Weber, 2014). From this, it is clear that it was unethical for paramilitary to be paid since all stakeholders' interests weren't considered.

Conclusion

This can be ranked as follows: utility dealing with the cost that results from the decisions, policies made, and actions taken. For Chiquita to continue operating in Columbia, it was a guarantee he will continue to pay for the paramilitary soldiers. Right is the second one. The company could not operate freely due to environmental threats from the soldiers. Justice; there was no distribution of the burden between the company and the state. Virtue becomes the least in the rankings. Chiquita did not possess good personal characters.

References

Lawrence, A. T., & Weber, J. (2014). Business and Society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education.