C HAPTER 2

Stakeholder Relationships,
Social Responsibility, and
Corporate Governance
 Chapter Objectives

• To identify stakeholders’ roles in business ethics

• To define social responsibility
• To examine the relationship between stakeholder
orientation and social responsibility
• To delineate a stakeholder orientation in creating
corporate social responsibility
• To explore the role of corporate governance in
structuring ethics and social responsibility in business
• To list the steps involved in implementing a
stakeholder perspective in social responsibility and
business ethics
 Chapter Outline

• Stakeholders Define Ethical Issues in Business

• Social Responsibility and the Importance of a
Stakeholder Orientation
• Social Responsibility and Ethics
• Corporate Governance Provides Formalized
Responsibility to Stakeholders
• Implementing a Stakeholder Perspective
 Relationships and Business

• Building relationships is one of most important areas

in business today
• Stakeholder framework
– Helps identify internal and external stakeholders
– Helps monitor and respond to needs, values, and
expectations of stakeholder groups
 What Is a Stakeholder?

• Customers
• Investors
• Employees
• Suppliers
• Government agencies
• Communities
 Primary vs. Secondary Stakeholders

• Primary stakeholders: Those whose continued

association is necessary for a firm’s survival

• Secondary stakeholders: Are not essential to a

company’s survival
 Social Responsibility and Ethics

• Social responsibility can be viewed as a contract

with society
– Economic
– Legal
– Ethical
– Philanthropic

• Business ethics involves carefully thought-out

rules (heuristics) of conduct that guide decision
making
 Corporate Governance

• Accountability

• Oversight

• Control

• Shareholder model

• Stakeholder model
 Implementing a Stakeholder
Perspective

1. Assessing the corporate culture

2. Identifying stakeholder groups
3. Identifying stakeholder issues
4. Assessing organizational commitment to social
responsibility
5. Identifying resources and determining urgency
6. Gaining stakeholder feedback