Stakeholders’ Protection
Traditionally, businesses focused on Shareholder Primacy (Milton Friedman: "The only social responsibility of business is to increase its profits"). Modern ethics focuses on Stakeholder Theory (R. Edward Freeman). A business must create value for all stakeholders.
Who are Stakeholders?
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Rights & Responsibilities
1. Employees
- Rights: Freedom from discrimination, Collective bargaining, Safe workplace.
- Company Responsibility: Pay fair wages, No forced labor.
2. Customers
- Rights: "Customer is King". Right to be heard (Redressal).
- Company Responsibility: Product safety (No exploding batteries), Truth in Marketing.
3. Competitors
- Rights: Fair competition.
- Company Responsibility: No industrial espionage, No predatory pricing (Monopoly abuse).
4. Government
- Rights: Compliance.
- Company Responsibility: Pay taxes, Follow laws.
Note
Enlightened Self-Interest: Protecting stakeholders is actually good for shareholders in the long run.
- Happy employees = Better productivity.
- Happy customers = Repeat sales.
- Happy community = No protests/lawsuits.
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