Exercise Two – Multiple Perspectives
When faced with an ethical issue how do those charged with leading an organisation, make their
decision. When asked to give an opinion or choice – what data do they need to collect, what
considerations do they need to take?
In your group you are asked to take on the role of senior management group or board of directors –
looking at the case study that you have been given, make a collective decision as to the best way
forward.
Your task is to explore multiple perspectives; think of all the people, both inside and outside the
organisation who might question your right to decide what is appropriate.
There are a wide array of people who have a ‘stake’ in the decisions being made on a daily basis,
decisions which focus on profit and do not take into consideration all the costs (health, stress,
environment etc..) involved in that course of action.
Conduct a stakeholder analysis, identify all the possible stakeholders affected by this case –
(Examples would include: employees, customers, consumers, local community, suppliers, investors,
the environment etc…)
Identify all of the costs involved in the decisions made.
From your list or mind map select (n) stakeholders and assign one stakeholder to each group
member – one group member is to act as Chair person ensuring the enquiry process is managed and
all stakeholders have their say. Each group member takes on the role of their assigned stakeholder –
asking questions and arguing the case from that perspective. Help to reveal all of the costs involved
in decisions.
At the end of the exercise, when all perspectives have been heard, come back together to make your
decision as a management team – be prepared to give a five minute debrief to the class.
Take notes throughout, you will need these for your personal reflections later.
Engaging Perspectives—Three Levels
To become adept academic decision makers, students must be able to interact as experts to engage
perspectives at three levels:
Level 1: Engaging a perspective for content. Here, students develop the skill of being able to
represent a perspective in traditional summary form—they can restate the perspective in their own
words, neither adding any additional material nor leaving any main ideas out.
Level 2: Engaging a perspective with empathy. Here, students learn to restate a perspective in
such a way that those in agreement with it feel that the speaker has presented their perspective as
well as or better than they could—that the speaker has been able to “stand in their shoes.”
Level 3: Engaging a perspective critically. Here, students work toward analyzing and critically
examining a perspective. They become experts on the perspective in terms of the definitions,
assumptions and claims that it relies on.
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Critical Inquiry Log 2 - STAKEHOLDER ANALYSIS
As part of this exercise you are required to capture your reflections upon the group enquiry
process. It is expected that over the module your critical enquiry will build a wealth of data
from which you will draw your essay ideas/ materials.
A wide reading base will serve you well – you are tasked with journal research for this log.
Keep the questions as your subheadings.
Stakeholder mapping:
Which case study did your group explore?
My group discussed Case Study Two, relating to Bio-Comm Ltd.
What were the major considerations that your group focussed on?
In this case, the decision to be made was whether it was acceptable to bribe a major
customer (with the bribe disguised as a ‘facilitation fee’) in order to avoid losing 45% of the
firms sales.
From an accounting background, my first instinct was that retaining such a large customer
would be of the utmost priority in order to ensure/maintain profitability. Traditional views of
maximising shareholder value had taught that shareholders are the priority stakeholder and
the main objective of a business is to create value for them through share price and
dividends.
However, when deciding on the ethicality of this decision, there were many more
considerations to take into account, although profitability clearly remained the easiest to fall
back on in any disagreement.
One major consideration that was discussed at length was the difference in culture relating to
bribery. In the UK, where half of the group had been brought up, bribery is strongly regulated
through the Bribery Act 2010 and carries strong penalties such as 10 years imprisonment
and the disqualification of directors. However, those from other countries such as Jordan,
saw bribery as ‘just a part of business’ and were of the opinion that bribery was necessary
and common, despite its illegality. A system such as this seemed to be ingrained in the
culture and when looking at the fundamental policies, the act of bribing a customer seemed
to make sense – a culture of bribery could be seen as the equivalent of offering discounts or
benefits for a new or retained customer which would be a common practice in maintaining
competitiveness (in the sense that you are giving them a better deal in order to have them as
a customer).
What challenges did your group face in identifying stakeholders?
There are many ways to separate types of shareholders – primary/secondary,
internal/external etc. When identifying the various stakeholders there were some obvious and
generic groups, for example shareholders, employees, customers (Sanyio PLC) and the
government. However, what was more challenging was deciding on how removed a
stakeholder could be from the Bio-Comm Ltd whilst still being affected by the decision. Here,
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it was possible to show that the final consumer (customers of Sanyio PLC) would be affected
by the change in supplier through various price/quality changes. Also, the employees of BioComm would not be the only set of employees affected – it would be extremely difficult to
prioritise the employees of the current company with the potential new employees of the
competitor in the Far East.
Prioritising the stakeholders was by far the most challenging aspect of this scenario. Whilst
most of the group found it easy to empathise with the viewpoint of the British employees who
would lose their job without bribery (especially as most students had experienced the
difficulties in getting a job in the first place), it is far more difficult to appreciate the benefits
that a successful manufacturing business in the Far East would bring (although at an
individual level, I found it impossible to decide that a job could mean more to one person than
the other). It would be extremely easy to fall back on the shareholder value theory, and state
that those who had invested were more important than all other stakeholders. However,
when placing yourself in the stakeholders’ position, the importance of other aspects becomes
far more real and the decision far more complicated.
Do you feel that your group engaged with multiple perspectives, explain your response.
How did your group decision differ from others in the class, thoughts that occurred to you?
In our group, there was a unanimous decision that a 45% drop in sales was too high a price
to pay without taking action to keep the customer. However, it was also agreed that a bribe
was not acceptable in its purest form. In the end, the majority consensus was to offer some
sort of discount (with the possibility to operate as a loss leader for the immediate future) or
loyalty benefit, whilst highlighting the fact that Bio-Comm could provide a higher quality,
experienced service. There were, of course, counter arguments to this, such as the fact that
the Far East manufacturing industry was rapidly catching up (and overtaking) quality
standards in the rest of the world, and the idea that a bribe could essentially be disguised as
a discount or other reward if only given to the largest customer. This would increase the
possibility of a slippery slope in which discounts would have to be offered to all customers to
avoid a sense of bias against those in the minority (another stakeholder who could therefore
be affected by the decision).
Personal insight into multiple perspectives:
Which stakeholder role did you take?
My role in the discussion was that of the shareholders of Bio-Comm i.e. the minority
shareholders (assuming that the Parent did not have full control).
What insights (related to ethics) did you gain from this process?
My first thought about the shareholders’ viewpoint was that they were interested in the
monetary consequences only i.e. profits, dividends and share prices.
As a single shareholder, I was able to decide that the decision over bribery could be heavily
influenced by each individual’s personal values. However, remembering my A level
Psychology course, I felt that the anonymity that came with the nature of shareholding could
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have a huge influence. The psychology of crowds and deindividuation came to mind and I felt
that any shareholder who could remain anonymous would act in their own best interests and,
if it was put to vote, would decide that profit was the ultimate and overriding objective.
There was only one group of shareholders who I thought might decide bribery was not
acceptable despite a huge shortfall in profits and dividends – those with large a shareholding
who would therefore be in the public eye when/if bribery is discovered and reported.
Overall, I believe that the majority of shareholders would not be overly fazed by the decision
to pay a small bribe in order to keep the business successful. However, I also believe that
this is not down to the shareholders’ ethical values, but rather the belief that they would not
be associated with the negative image of bribery and would be able to show that they were
not part of the decision making. In this case, I thought that ethics may play a backseat to
business, particularly when most people are educated in terms of economics and profits with
ethics as an afterthought.
What did you notice/ learn about group decision making processes?
In a group of mixed nationality and education, there were clear differences in opinion thought
process. The majority of the group had come from accounting/economics backgrounds and
so were fairly adamant that a 45% drop in sales was too high a price to pay for maintaining
the parent company’s no bribe policy.
At one stage, the discussion moved onto the employees who may lose jobs if the British
manufacturing ceased. It was argued that the increased problems for the employees and
their families would be too great a price to pay for the sake of a £10,000 bribe. This was
argued against from a perspective of someone who had seen the living conditions of the
unemployed in Tanzania, and so from his perspective the benefits of employment in a less
developed country would outweigh the drawbacks of unemployment in Britain (where
unemployment benefits would ensure a minimum standard of living). This example
highlighted, for me, how complex even the simplest of issues could be when in a business
environment, especially when relating to ethics, and brought out even more questions with
regards to the remoteness of stakeholders and their importance.
Move on to a review of the research related to multiple perspectives or stakeholders.
Resource used; Fassin, Y. (2009) The Stakeholder Model Redefined. Journal of Business
Ethics, Vol. 84, No. 1, pp. 113-135
When and where was it written – how does this affect what is being argued?
Published in 2009, this article about stakeholder theory comes as stakeholders become
increasingly important to companies. As stakeholder mapping seems to have become a
widely used management activity, this article notes that there is ambiguity and therefore a
need for clarification in order for businesses to effectively identify stakeholders. Therefore,
the article aims to use a well-established model to enhance the understanding of stakeholder
theory, and as such the arguments presented seem to be fairly neutral.
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The Journal of Business Ethics itself is a reputable publication and therefore the content in its
articles can usually be assumed to be high in quality. This said, it is always necessary to be
aware that this is the research of one individual and its concepts (for example the
introduction of the phrases ‘stakekeeper’ and ‘stakewatcher’) may not be accepted by the
general business world.
What ideas can I take from this paper?
The main idea I have grasped from this paper is that stakeholder mapping, in its simplest
form, is undoubtedly an extremely useful and acknowledged technique used by
management. However, as with any theory, there are clear problems when attempting to
understand some aspects. This begins with the definition of a stakeholder and extends to the
varying types of stakeholder. The biggest downfall I can see for this theory is the seemingly
impossible task of deciding which stakeholders are more/most important, although there
does certainly seem to be a benefit in having this graphical reinforcement of the theory to aid
the understanding by practitioners.
By introducing a new model, the ‘stake model,’ Fassin has attempted to bring the original
stakeholder model closer to a real world example. However, I feel that this model may prove
impractical for managers to use. By incorporating different stakeholders (stakekeepers and
stakewatchers), managers may be inclined to neglect or treat differently these stakeholders
as they are already labelled as different. Essentially, it may give managers an excuse or easy
way out if they are looking to ignore the views of a particular group, as they are not seen as
‘stakeholders’ in the truest sense. On the other hand, the opposite could happen, and giving
pressure groups and regulators separate statuses may bring them even further to the
forefront of a managers’ decision making.
At the very least, stakeholder models have helped to ensure that managers are aware of and
have a simple, generic way to understand their responsibilities to a wide reaching
community. In this way, they can at least begin to realise the importance of ethics when
decisions are made.
What other questions does the argument in this paper create for me?
It is difficult to tell whether managers will understand (or be inclined to adopt) more
complicated ways to produce stakeholder analyses. Therefore, it will be interesting to know
whether those who put the theories into practice actually find that they could use a more in
depth method of stakeholder mapping, or whether this is purely academic.
How does this paper contribute to my understanding of ethics and organisations?
The abstract for this paper stood out for two reasons. Firstly, the opening sentence describes
the ‘simplicity’ of the stakeholder model. Secondly, the ‘ambiguity and vagueness’ of the
stakeholder concept is discussed as an issue. On first glance, this model does in fact seem
very simple and is what I had initially pictured when asked to produce a map of stakeholders
in the second tutorial. However, as I and the rest of the group found out very quickly, there
were many complications on deciding who were stakeholders and who, perhaps, were more
or less ‘important’ stakeholders. On the further removed stakeholders in particular, it seemed
easy to argue for or against their inclusion in a stakeholder map.
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This paper, with its suggestion of new types of stakeholders (stakekeepers and
stakewatchers) helps to understand just how far reaching (yet possibly unpredictable), the
consequences of businesses ethical decisions can be.
Relevant lectures and group discussions
Nicholas Colloff – Director of Innovation at Oxfam
What was said?
Mr Colloff began by explaining the roles that Oxfam play in society, namely responding to
humanitarian emergencies, advocacy and campaign work, and performing the role of an
international development agency.
Some key points that I took from this lecture were as follows;
Oxfam’s work with businesses and CEO’s has shown that businesses in general are in need
of greater clarity over sustainability issues. This was highlighted in the fact that CEO’s do not
seem to have any clear idea on how their business models were going to have to change in
the next twenty years, in order to respond to a rapidly changing business, economic,
environmental and social environment.
One huge problem highlighted was that of agriculture. Some stark figures pointed out were
that 80% of the world’s food comes from small scale farmers, despite these farmers being
effectively locked out of most supply chains. Also, the fact that almost half of produce is
wasted before it can even be delivered to the final customer showed just how much of an
improvement will need to be made in order to cater to an extra two billion people as predicted
by population estimates. However, many barriers seem to exist, in particular the need for
short term profit being balanced against long term changes (an issue which would put
shareholders and directors in direct competition with other stakeholders, including future
generations). Also, this necessity for short term gains would seem to be detrimental to many
innovative ideas which could improve peoples’ welfare in the future (although this didn’t seem
to affect projects such as waterless soap).
Two of Oxfam’s most used methods for action were showed to be collaboration and
campaigning and these were shown not to be mutually exclusive, particularly in large
multinational corporations. Also, an interesting (and yet intuitive when thought about
properly) fact was that the most successful companies in sustainability were those labelled
as ‘serial past offenders’ due to a realisation that they could not simply be cosmetic in the
way that they adopted CSR and instead required serious changes.
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The last point which highlighted how sustainability and ethics would prosper in business was
the fact that very few companies seem to ‘get’ sustainability. These, however, would be the
companies that Oxfam would work with in order to lead from the front in their advances,
rather than attempting to educate those who did not really believe in the theories. As such,
leaders in sustainability, stakeholder theory and other ethical practices would be hugely
important in shaping business in the future.
What were my reactions to the argument or logic that was presented?
What ideas can I take forward?
Essential journals to consult:
Academy of Management Review
Business Ethics - A European Review
Electronic Journal of Business Ethics and Organisation Studies
Journal of Business Ethics
Journal of Management Studies
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