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Stakeholders and Stakeholder Orientation

Published July 10, 2013 by Mayrbear's Lair

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Corporations establish stakeholder orientation because of the influence that ethical issues and social responsibility play in their success and longevity. Boatright (2009) posits that in the traditional system of corporate governance the decision making power is controlled by the shareholders. In addition to control, shareholders are also entitled to the profits (Boatright, 2009). In a business environment however, there are many other groups that have a claim or “stake” in some respect to an organization’s products and services. In addition to the shareholders and investors, the organization’s stakeholders also include the employees, customers, suppliers, government agencies, communities and other special groups that have a claim in some form of the organization’s merchandise, operations, markets, or other areas of interest. This group is known as the primary stakeholders. The secondary stakeholders are the special interest groups and the media that also help influence the operation of a company without direct economic exchange. In this context, primary and secondary stakeholders are in a position to help define an organization’s ethical policies.

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In addition, stakeholders influence business outcomes and businesses influence stakeholders as well. Ferrell et al. (2013) describes this as a two-way relationship. Stakeholder orientation is identified as the manner in which an organization comprehends and tackles stakeholder demands with respect to ethical and social responsibility issues. The corporate governance process is comprised of three sets of actions that include: (a) the collection of information and data throughout the firm, (b) the disbursement and integration of the information, and (c) the reaction of the organization to the information (Ferrell, Fraedrich, & Ferrell, 2013). In short, stakeholder orientation implements methods to address and manage stakeholder concerns with respect to social responsibility to the community and the environment.

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Because stakeholders have the ability to withdraw their resources, they are critical to an organization’s success and are in a position to define important ethical issues. Organizations that develop effective stakeholder orientation plans identify the corporate culture, stakeholder groups, their issues, and create an open atmosphere for feedback. These are corporate governance strategies that help leaders comprehend the importance of social and ethical responsibility. For example, when activist groups with the help of the media (secondary stakeholders) disclosed to the public that Burger King’s beef supplier was destroying the Brazilian Rainforests, primary stakeholders (consumers, employees, and government agencies) united to boycott the organization to change their behavior. This movement caused Burger King to experience huge profit losses and as a result was forced to implement more ethical decisions into their business practices. The media exposé made stakeholders respond to the significant environmental issue which influenced a change in the business policies that governed the corporation. By making this change, Burger King showed it was a socially responsible corporation. This tactic help them regain their fair share of the market again. In this context, the primary and secondary stakeholders clearly affected how the corporation engaged in tactics of social responsibility with honesty and fairness to achieve positive outcomes. The rain forest was no longer being destroyed by Burger King’s business practices and as a result embraced Greener policies. These actions displayed they were socially responsible by engaging in ethical practices. In doing so, they won back the public’s trust and confidence in their brand.

References:

Boatright, J. (2009). Ethics and the Conduct of Business (Sixth ed.). Upper Saddle River, NJ: Pearson Education, Inc.

Ferrell, Fraedrich, & Ferrell. (2013). Business ethics and social responsibility (9th ed.). Mason, OH: Cengage Learning.

Ethics and Social Responsibility

Published March 13, 2013 by Mayrbear's Lair

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It is important that entrepreneurs create a culture of ethics and social responsibility because people want to conduct business with an organization they trust. The way an organization responds to the needs of the consumers and stakeholders can reveal the character and moral rules that govern their conduct. According to Wicks and Freeman (2010) the failure of connecting ethics to the core of a business enterprise and to the decision making process from the leaders and managerial staff, is dysfunctional and an unhealthy approach to business (Wicks & Freeman, 2010). The benefits of ethical and standardized social responsibility an enterprise incorporates are intrinsic to an organization’s image and can have an impact on employee morale. For example, when a CEO creates an ethical culture that consists of rewards, benefits, and special programs for staff members, it is likely the company will produce loyal employees and have little turnover. Entrepreneurs who make their staff feel valued with components that include fully paid health insurance, life-related support programs, day care centers for working families, and social events, can motivate employees, and instills a company pride that can create a joyful climate.

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Ferrell and Fraedrich (2012) suggest that in a business environment, providing a model that can identify, examine and resolve ethical issues helps business owners coherently assess the “bottom line” value of ethical behavior (Ferrell & Fraedrich, 2012). For instance, an entrepreneur made the discovery that one of their product ingredients included parts of beetles that were not clearly disclosed on the packaging. The ethical decision the leader faces is whether to acknowledge the ramifications and repercussions by revealing the truth in an effort to conduct themselves in a transparent manner. Investigating alternative ingredient sources is a solution that can be costly to the organization. On the other hand, the business owner can take a cost effective approach, by keeping the information classified, guarded under lock and key, praying no one will find out. In such cases, worrying about ethical disasters can lead business owners to take a reactive approach out of fear and anxiety. This method tends to miss the mark in terms of creating a desired outcome because their problem-solving tools lack an ability to react in a positive constructive way. At this stage, they are focused on covering their tracks, a path that will ultimately jeopardize the organization’s ethical foundation and ability to sustain a successful business.

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Shaw (2008) defines business ethics the study of what constitutes right and wrong human conduct in a business context and the moral standards concerned with behavior that seriously affects the well-being of individuals. Concepts like good and bad; duty and obligation; as well as moral responsibilities are some of the components that address business ethics. Each organization has a professional code of ethics that govern the conduct of members in a given profession. Sometimes these codes are unwritten, like not dating co-workers for example. Violation of these codes can result in the disapproval from peers and in extreme cases the loss of a license or a career (Shaw, 2008).

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In addition, an organization has a responsibility to conduct business in manner that is not destructive to the environment which in turns affects the populace (consumers). This kind of unethical business practice can have devastating effects on a company’s success. Take for example an exposé that revealed in the mid-1980s that Burger King, in an effort to meet growing consumer demands, engaged in practices that led to the deforestation of an enormous portion of the Amazon rainforest to raise cattle for beef import. Consumers and environmentalists were in an uproar. Armed with scientific evidence to support the importance of rain forests on our ecosystem, a movement was created to boycott the corporation. As a result, Burger King suffered great losses reflecting a 12% decrease in revenue. This urged them to cancel their $35 million contract with Costa Rican beef suppliers agreeing to use US domestic cattle only. This demonstrated Burger King’s ability to conduct their business affairs more ethically (Aronoff, 2011). Burger King’s strategy embraced an ethical culture by finding a solution to create a business culture that displayed a concern for the environment as well, a tactic that helped them regain their status in the marketplace. In conclusion, entrepreneurs that are concerned with ethics and social responsibility create a foundation for success and sustainable business practices that consumers can trust.

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Amazon Deforestation

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References:

Aronoff, K. (2011, September 18). US activists stop Burger King from importanting rainforest beef. Retrieved January 30, 2013, from Global nonviolent action database: http://nvdatabase.swarthmore.edu/content/us-activists-stop-burger-king-importing-rainforest-beef-1984-1987

Ferrell, O., & Fraedrich, J. (2012). Business ethics: Ethical decision making (9th ed.). Mason, OH: South-Western College Publishing.

Shaw, W. (2008). Business ethics. Belmont, CA: Thomas Higher Education.

Wicks, A., & Freeman, E. (2010). Business ethics. Upper Saddle River, NJ: Pearson Education, Inc.

Population Density

Published February 15, 2013 by Mayrbear's Lair

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Introduction

Mankind’s global population density problem was exposed in the 1960s and 1970s from heavily saturated media coverage.  Attention was put on demographic behavior which includes changes in population size, composition, and distribution as well as the significant affects it has in policymaking at all levels, local, state, national, and international.  The term demography comes from the Greek words demos and graphia. The word “demos” translates to population and “graphia” means writing.  Therefore demography literally means “writings about populations.” This research takes a look at the American experience of growing populations, the special rules that emerge as a result from the problems they face, and how different classes of the populace deal with their challenges.  Without observing the human agent, consequences can be disastrous. Demographic studies can help determine the factors that affect changes in the environment and its inhabitants.

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Population Fluctuation

The social science of demography focuses on the following components: (a) the size, composition, and distribution of the human population in a given area at a specific point in time; (b) the changes populations experience (like fertility, mortality, and migration); and (c) the consequences from changes in relation to population size, composition, and distribution, or in the components themselves (Poston & Bouvier, 2010).  By studying the demographics of a population scientists and policy makers can determine different aspects of change both ecologically and economically to help predict future needs and problems a civilization may face.

According to the US Census Bureau, the current world population has reached 7 billion with 315 million situated the US (Commerce, 2013).  As the global population continues to increase analysts are working on solutions on how to meet growing consumer needs.  In nature, when the demands of the masses are not dealt with, migration and starvation problems ensue.  When critical mass is reached, and the population has stripped the land of vegetation and healthy soil, entire civilizations are inclined to fall as archeological evidence suggests transpired on Easter Island in the South Pacific.

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Yaukey and Douglas (2007) purport that observing the size and constitution of a population is not enough to understand and predict change.  A look at the diverse range of criteria including the age, sex, marital status, educational attainment and spatial distribution are significant components that can help a society interact with each other as well as the physical environment in which they exist (Yaukey & Anderton, 2007).  This is necessary to make assessments to adjust and help maintain the delicate balance of the planet’s natural resources, like food and water which may become disturbed by consumption without replenishment.

Take for example, the hardship of the early settlers and pilgrims at Plymouth Rock whose existence differed from that of the pioneers that later headed westward during the great American expansion era.  The Plymouth Rock settlers faced decreased population due to their lack of knowledge in surviving the harsh conditions of the new wilderness.  Local neighboring Native Americans from nearby tribes educated the settlers in farming, hunting and other survival techniques.  This crucial component allowed the population to thrive which ushered the expansion age of the Westward Pioneers.  By observing the rise and fall of various cultures, demographers can make predictions as to how a civilization can evolve and thrive.

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Factoring Trends

Trends also play an integral role in the evolution of a society with special rules that can emerge as a result of various changes.  Demographers can work with policy makers to create new systems and adaptations as solutions to problems a populace may face in areas like education, clean air and safe water reforms, as well as environmental reforms.  For example, by observing the trend of globalization in fast food corporations, an exposé revealed in the mid-1980s that fast food giant Burger King, in an effort to meet growing consumer demands, engaged in practices that led to the deforestation of an enormous portion of the Amazon rainforest to raise cattle for beef import.

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US environmentalists were outraged.  Armed with scientific evidence that supports the important role rain forests have on our ecosystem (like keeping carbon from being released into the atmosphere, and the oxygenation of our planet), they formed movements to actively boycott the corporation.  Their efforts succeeded.  Burger King suffered great losses from the negative press reflecting a 12% decrease in revenue. A change emerged in the company’s attitude. They cancelled their $35 million contract with Costa Rican beef suppliers and agreed to use US domestic cattle only (Aronoff, 2011).  Although Burger King no longer is engaged in this practice, according to a report released by Greenpeace, the deforestation of the Brazilian Amazon continued with 7000 km of the rainforest destroyed in just a five month period due to the rising demand of beef and soy products (Amazon, 2008).

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Observing the demographics of different classes, or social statuses of populations can help us better understand the needs of a particular part of the human agency. For example, in areas of developing nations where birth rates are rising, the effects of rapid population results in higher levels of consumption of resources.  Research suggests less affluent  less educated groups, expand their population and utilize the labor force of their offspring as a means to sustain the family, tribe or community.  Societies that consist of a populace with higher education on the other hand, are less likely to confront the same overcrowding issues and make choices based on the importance and inter-connectedness of their surroundings. Their conscious adaptations reflect a society that consists of families who produce less children. In addition, women are supported and empowered to experience their own careers. Their contributions helps balance the family unit which adds to a more fulfilling life of comfort and joy.

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Conclusion

Demography is an essential component for understanding and predicting changes and trends that help direct us to a better future. Without these studies, which includes the observation of present conditions, as well as from clues left behind from extinct civilizations, more events like Easter Island will occur.  People who are conscious of the consequences that lead to climate change, make adjustments to allow inhabitants to continue thriving.  In conclusion, as we continue to develop technologies, demographic studies and further advancements in education can help regulate population density and predict future trends.

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References:

Amazon deforestation on the rise again. (2008, January 25). Retrieved January 30, 2013, from Greenpeace International: http://www.greenpeace.org/international/en/news/features/amazon-deforestation-increase-250108/

Aronoff, K. (2011, September 18). US activists stop Burger King from importanting rainforest beef. Retrieved January 30, 2013, from Global nonviolent action database: http://nvdatabase.swarthmore.edu/content/us-activists-stop-burger-king-importing-rainforest-beef-1984-1987

Commerce, U. D. (2013, December 03). US and world population clocks. Retrieved January 30, 2013, from Us Department of Commerce: United States census bureau: http://www.census.gov/main/www/popclock.html

Poston, D., & Bouvier, L. (2010). Population and society: An introduction to demography. New York, NY: Cambridge University Press.

Yaukey, D., & Anderton, D. (2007). Demography: The study of human population. Long Grove IL: Waveland Press, Inc.