In the following situations, identify the stakeholders who would be affected and

Question

In the following situations, identify the stakeholders who would be affected and how The Utilitarian Approach, The Rule-Based Approach, or The Golden Rule apply.

1) The headquarters of a major retail chain is considering closing its only location in a small town.

2) The company you work for is hiring for a high-level position. You know that a member of your family is applying for the position and you’ve been asked to be a part of the hiring committee.

3) A company misrepresents its earnings to shareholders and financial analysts.

Explanation / Answer

1. The headquarters of a major retail chain is considering closing its only location in a small town.

Ans: The stakeholders who would be affected by the closure of a major retail chain are customers of that small town, employees working in that location, distributors, buying groups, competitors, suppliers etc. The utilitarian approach applies here as it is a ethics based on act utilitarianism which says choosing the actions based on causing greatest benefit or happiness. If the retail chain is bearing huge losses and sustenance is difficult then it is better to shut down the retail chain. A company cannot run in losses and with loss its difficult to handle employees, customers, and their needs.

2. The company you work for is hiring for a high-level position. You know that a member of your family is applying for the position and you’ve been asked to be a part of the hiring committee.

Ans: The stakeholders that would be affected are employees, the company itself and management. There is a high chance of favoritism and conflict of interest. But in this position, the Golden Rule applies where the people should others like them with compassion and consideration.

3. A company misrepresents its earnings to shareholders and financial analysts.

Ans: The stakeholders affected are shareholders, financial analysts, society etc. Here, the misrepresentation or fraud is unethical and it is ethical egoism where the company claims and thinks for its self-interest rather than the stakeholders. It is a consequentialist theory which is detrimental to others.

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