- 20 Marks
Question
Richard and his wife, Rachael, have just retired as top-level managers from one of the biggest oil companies in the country. They have earned substantial personal wealth and have ample investments in several blue-chip companies. Rachael, a food technologist passionate about healthy living, convinced Richard to start a company to produce organic drinks and foods from only natural ingredients. She also suggested that the company adopt environmentally friendly manufacturing processes and consider the wellbeing of all employees and other stakeholders.
The primary reason for establishing the company is to fulfill a passion, build a sustainable, socially impactful business, and not aggressively pursue profit. Hence, both Richard and Rachael are happy to just break even initially and later record minimal profits.
As an expert in business ethics, you are required to:
(a) Identify the alternative ethical stances available to Richard and Rachael and the ones implied in the scenario. (4 Marks)
(b) Discuss Gray, Owen, and Adams’s classification of groups of people and their views of the relationship between business organizations and society. (14 Marks)
(c) Which of the classifications in (b) above is relevant to Richard and Rachael? (2 Marks)
Answer
(a) Alternative Ethical Stances
Explanation: Ethical stances define a business’s approach to its societal responsibilities. The main stances include:
Maximizing Short-term Shareholder Interests: Focus on profit generation.
Maximizing Long-term Shareholder Interests: Balances profit with long-term sustainability.
Multiple Stakeholder Obligations: Recognizes responsibilities to various stakeholders, beyond profit.
Being a Shaper of Society: Actively pursues societal good, sometimes at the expense of profit.
Implied Stance: The scenario implies either the multiple stakeholder obligations stance or the shaper of society stance, as Richard and Rachael prioritize social and environmental impacts.
(b) Gray, Owen, and Adams’s Classification of Views on Business and Society
Explanation: This classification outlines societal expectations of business responsibilities:
Pristine Capitalists: Focus solely on maximizing shareholder wealth.
Expedients: Primarily profit-driven but accept social responsibilities when beneficial to business interests.
Proponents of the Social Contract: Believe that businesses exist with a duty to society and must act in socially responsible ways.
Social Ecologists: Emphasize corporate responsibility in solving environmental and societal issues.
Socialists: Advocate for significant restructuring to reduce corporate dominance and improve equality.
(c) Relevant Classification
Explanation: Richard and Rachael align with the Social Ecologists classification, as they show concern for the environment and ethical practices in business operations.
- Topic: Ethics in Business
- Series: MAY 2023
- Uploader: Theophilus