STAKEHOLDER THEORY

PROFIT MAKING AND ETHICS

GROUP MEMBERS
• Arya Rajeev 7705
• Pratik Botra 7715
• Ajinkya Dingankar 7725
• Jagruti Godambe 7735
• Shivraj kakade 7745
• Riddhi Lakhani 7755
FLOW OF PRESENTATION

• Introduction to
stakeholder theory

• Internal stakeholders

• External stakeholders
INTRODUCTION TO
STAKEHOLDER THEORY
STAKEHOLDER THEORY
DEFINITION:

 Stakeholder theory is a

“ A conceptual framework of business

ethics and organizational management
which addresses moral and ethical
values in the management of a business
or other organization. ”
 Corporations are not simply managed in
the interests of their shareholders
alone, but that there are a whole range of
stakeholders.
 It identifies and models the
groups, which are stakeholders of a
corporation and both describes and
recommends various methods to satisfy
them.
 Ethical organization recognizes its
responsibilities towards all stakeholders.
There are two types
of stakeholders :
 INTERNAL STAKEHOLDERS.
 EXTERNAL STAKEHOLDERS.
 stakeholders

internal external

Customers
Shareholders Suppliers
Creditors
Employees
Competitors
management Government
society
INTERNAL
STAKEHOLDERS
 RESPONSIBILITY TOWARDS
OWNERS/SHAREHOLDERS

1. Proper use of capital

2. To manage business effectively
3. To provide accurate and timely information
4. Ensure growth and appreciation of owner’s
capital
5. Provide regular and fair return on owners
capital
 RESPONSIBILITY TOWARDS
EMPLOYEES
• Fair compensation for service provided
• Timely and regular payments
• Provision of proper working and welfare conditions
• Job security
• Provision of security benefits and better living conditions
• Training and development opportunities
• To recognize and honor individual worker’s right
• Fair and unbiased treatment to all
 RESPONSIBILITY TOWARDS
MANAGEMENT

•Management decisions have impact

•Shareholder’s expects higher

returns

•Management has a fine balance

EXTERNAL
STAKEHOLDERS
RESPONSIBILITY TOWARDS CUSTOMERS
(Mitsubishi Electric’s)

• Ensuring consistent quality

• Providing ease-to-use products

• Increasing customer satisfaction

• Responding to product-related issues

Responsibilities
towards
Suppliers
RESPONSIBILITIES TOWARDS
SUPPLIERS

• Giving regular orders

• Dealing with suppliers on fair terms
and conditions
• Availing reasonable terms of credit
• Timely payment of dues
• Helping suppliers in improving or
upgrading the quality
Responsibilities taken up by Casio
Worldwide towards its Vendors
• Casio has established Procurement Policies in order
to execute its social responsibility to conduct fair
and equitable transactions throughout the supply
chain. The policies cover matters including legal
compliance, respecting human
rights, labor, safety, and health, as well as
environmental protection such as biodiversity
preservation and risk control of chemical contents
and information security
Casio strives to achieve the following
• Fair & equitable transactions
• Compliance with laws and social norms
• Environment Protection
• Strengthening partnerships with suppliers
• Policies of Supplier selection & transaction
continuation
• Securing right place & quality
• Prohibition of personal-interest relationships
Responsibilities
towards
Investors/Creditors
RESPONSIBILITIES TOWARDS
INVESTORS/CREDITORS

• To provide fair returns on capital invested

• To supply complete and accurate information
• To ensure that the value of investment doesn’t
fall in the long term
• To raise public image of the company
• To improve prestige of the company
RESPONSIBILITIES TOWARDS
INVESTORS/CREDITORS

• To undertake R&D activities for diversification

• To build up financial stability and ensure safety
of investment
• To ensure timely payment of interests and
principal
• To not participate in unethical practices and
bring disrepute to the company
Responsibilities
towards
competitors
RESPONSIBILITIES TOWARDS
COMPETITORS

• Not to claim exceptionally high

commissions to agents and
distributors
• Not to offer too high discounts
to the consumers
• Not to defame competitors
directly or indirectly
Responsibility towards
society and government
RESPONSIBILITIES TOWARDS
SOCIETY

• Business morality
• Development of backward
areas
• Efficient use of resources
• Financial assistance
• Protection of environment
MILK ADULTERATION
MARUTI SUZUKI
RESPONSIBILITIES TOWARDS
GOVERNMENT

• Payment of taxes
• Obeying rules and regulations
• Giving suggestions
• Financial help during
emergency
• Earn foreign exchange
HELP TO UTTARAKHAND
FLOOD VICTIMS
Profit Making-An Objective with
Ethical Dimension
Profit making and Ethics is very hard to be
distinguished.
Unitarian View-Morality & Ethics are related to
business
Separatist View-Business should concentrate on
profits and ethics & business doesn’t form a part of
it.
Integration View-Ethical Behaviour and Business
Integrated
Consumers are becoming more and more aware of the
unethical practices of the orgainzation
You can't make a profit without customers, and
customers won't use your business if you outrage them
too much.
 BodyShop was one of the first businesses to build on
this trend.
Most immoral business practices are actively illegal, at
least in Europe and North America
SOME OF WORLD’S ETHICAL PROFIT
MAKING ORGANIZATIONS
 CONCLUSION
Thus , ethical organization
is the one that recognizes
its responsibilities towards
all stakeholders and
considers their interest
Webliography
• http://www.forbes.com/sites/jacquelynsmith/2013/
03/06/the-worlds-most-ethical-companies-in-2013/
• www.managementparadise.com
• www.moneycontrol.com

• http://essayinfo.com/sample/essay/884/16/
• www.wisegeek.org/what-is-cwww.
Thank you