Create a 5 pages page paper that discusses do stakeholder ethics have a useful role in business ethics. Some in such great positions of power that acting in their own self-interest or their shareholder’s self-interest without recourse to other considerations could lead to disastrous consequences. This is especially true of managers, who have, in the common conception, a variety of responsibilities including the maximization of profits of shareholders, the maintenance of professional practices, and the proper treatment of employees In order to reconcile these vast and complex issues, a theory called “stakeholder theory” was developed, which essentially sought to use the model of shareholder profit maximization, but apply it to more interested parties in the transaction. Essentially, a manager’s duty was thus to balance and coordinate the interests of all interested parties, including employees, customers, and shareholders, so that an “everyone wins” scenario could occur (Heath, 2006, 545). But is this in fact a useful way to understand business ethics? A successful business-ethical model must pass a number of common-sense tests to be useful. It must be comprehensible enough to be practically useful and practical for managers in real-world situations. It must be internally self-consistent, in that following its own precepts will not cause violations of its own internal ethical code. It must feel “intuitively” moral so that it can work with broader moral compasses (Heath 2006, p. 542), and it must actually be useable and able to be executed in the field. The Stakeholder model, though fulfilling some of these requirements, fundamentally fails at the majority of them and is thus not a useful moral code for the business world.
In terms of the first requirement, that a system of business ethics must be comprehensible enough to be understood and used by managers in the field, stakeholder theory actually meets those requirements. The fundamental relationship on which the stakeholder model is built is that of the profit maximization.