Business ethics

1. Stakeholders and the range of business ethics

The concept of the stakeholder – someone who occupies a role within the business or who belongs to a recognized group outside the business that is affected by its activity – lies at the centre of business ethics. The literature tends to concentrate on stakeholders in bigger companies on the American model: companies quoted on stock exchanges, with impressive turnovers, large numbers of employees, and several layers of management. Such companies are involved with a wide range of stakeholders, both internal and external to the organization. The ‘internal’ stakeholders include directors, managers, ordinary shop-floor or ‘blue-collar’ employees, and shareholders. Outside the company there are customers, suppliers, competitors, local communities, and one or more levels of government. Business ethics as a whole may be regarded as a unified understanding of the obligations of those who run a business – directors or top managers – to the rest of a business’ stakeholders. Alternatively it may be seen as a unified understanding of the typical ethical risks or problems facing the internal stakeholders in their dealings with one another and outsiders. Both conceptions are well represented in the literature, and both accommodate the central issues of business ethics.