A STAKEHOLDER APPROACH

AND BUSINESS ETHICS

Liliana inggrit wijaya

KEY POINTS
1. Why a stakehoder approach to business
ethics?
2. Stakeholder analysis defined
3. How to execute a stakeholder analysis
4. Moral responsibilities of functional area
managers
5. Executing a stakeholder analysis as an
observer
6. Stakeholder Analysis and ethical reasoning

1. Why a stakehoder approach to

business ethics?
A method for mapping anad managing the
complex moral relationships between a
corporations strategic activities and those who
effect and are affected by such actions
Stockholder approach focuses on financial and
economic relationships
Stakeholder approach includes moral,
political,ecological, and human welfare interests
as well as economic factors.

2. Stakeholder analysis defined

A framework that enables users to map and then
manage corporate relationships (present and
potential)with groups who affect and are affected
by the corporations policies and actions
One goal of stakeholder analysis from a firms
perspective is to create win-win situations for
itself and its stakeholder relationships.
The purposes are identifying and managing
social responsibility roles and relationships
between a company and its constituents/external
groups

 A stake is any interest, share, or claim a

group or individual has in the outcome of a
corporations policies, procedures, or
actions toward others.
A stakeholder is any individual or group
who can affect or is a affected by the
actions, decisions, policies, practices, or
goals of the organization

Type of stakeholders
Primary stakeholders, includes
owners/stockholders, customers, employees,
suppliers and board of directors
Secondary stakeholders, includes all other
interested groups such as the media,
consumers, lobbyists, courts, governments,
competitors, the public and society
Stakeholders also have stakeholders

3. How to execute a stakeholder

analysis
1. Mapping stakeholder relationships
2. Mapping stakeholder coalitions
3. Assessing the nature of each stakeholders
interest
4. Assessing the nature of each stakeholders
power
5. Constructing a matrix of stakeholder moral
responsibilities
6. Developing specific strategies and tactics
7. Monitoring shifting coalitions

OWNERS
POLITICAL
GROUP

FINANCIAL
COMMUNITY

ACTIVIST
GROUP

GOVERNMENT

FIRM

SUPPLIERS

CUSTOMERS

ADVOCATE
GROUP

COMPETITORS

TRADE
ASSOCIATIONS

UNIONS
EMPLOYEES

Step 4: assessing the nature of

each stakeholders power
1. voting power
2. political power
3. economic power

Step 5: Stakeholder moral

responsibility matrix
legal

economic ethical voluntary

Who are the most important

stakeholders?
Supervisory
Middle
Executive
Managers Managers Managers
Customers
Myself
Subordinates
Employees
Boss(es)
Co-Workers
Colleaques
Managers
Owners
General Public
Stockholders
Elected Public Official
Government

5.57
6.28
6.06
5.93
5.72
5.87
5.66
5.26
4.07
4.38
3.35
3.81
3.09

6.10
6.29
6.30
6.11
5.92
5.82
5.78
5.56
4.51
4.49
3.79
3.54
2.05

6.40
6.28
6.14
6.01
5.82
5.81
5.75
5.75
5.30
4.52
4.51
3.79
2.90

4. Moral Responsibilities of Functional Area Managers

POLITICAL
GROUP

OWNERS
FINANCIAL
COMMUNITY

ACTIVIST
GROUP

GOVERNMENT

Managers in a job

SUPPLIERS

CUSTOMERS

ADVOCATE
GROUP

COMPETITORS

TRADE
ASSOCIATIONS

UNIONS
EMPLOYEES

5. Executing a stakeholder
analysis as an observer
Observer stakeholder outside or inside a
company
Provides useful information and
perspective toward understanding
strategic political, economic, and moral
relationships

6. Developing specific strategies

and tactics
First
: directly or indirectly
Second : offensive or defensive
Third : accommodate, negotiate,
manipulate, resist, avoid, or do
nothing
Finally
: combination of strategies

Stakeholder Analysis and ethical

reasoning
The stakeholder analysis requires the
focal or principal stakeholders to define
and fulfill their ethical obligations to the
affected constituencies

 end