The Kaplan eGuide to Ethics and the Legal Environment
Chapter 2
This mandatory weekly reading assignment is designed to supplement your online coursework and help you to understand the basic concepts behind ethics and philosophical arguments.

In This Chapter
Case Study: The Case of the Forgotten Stakeholders
p. 2
This case study explores the need for an organization to clearly identify all of its stakeholders and the impact of its decisions on them.
Corporate Social Responsibility
p. 3
This section introduces the four areas of corporate social responsibility: economic, legal, ethical, and philanthropic.
Stakeholders
p. 4
This section defines the concept of stakeholders and explains why managers must identify stakeholders and take their interests into account.
Chapter Summary
p. 5
This summary applies the concepts of corporate social responsibility and stakeholder management to the Woodland Products case study.
Resources and Recommended Readings
p. 7
Each week, the eGuide provides a list of additional topical readings, including many online resources.

eGuide to Ethics and the Legal Environment

Chapter 2: Page 1 of 7

eGuide to Ethics and the Legal
Environment
Businesses do not exist in isolation. The decisions a business makes affect more than the business itself. The individuals, groups, or entities affected by the business decision are the stakeholders. For example, any decision regarding salary and benefits affects not only the employees, but the employees’ families, the community, and potentially the industry. In addition, the practice of corporate social responsibility demands that businesses operate in such a manner to achieve goals in four different yet related areas: economic, legal, ethical, and philanthropic. This chapter focuses on identifying the various stakeholders and their unique interests. It also describes ways in which business decisions can satisfy shareholders and maintain a profit, yet still be accountable under the four areas of corporate social responsibility.

Case Study: The Case of the Forgotten
Stakeholders
Josiah is the manager of a production group for a small furniture manufacturer, Woodland
Products, Inc. The business is stable and profitable. The majority of employees have long tenure with the company, and most have no interest in leaving because of the outstanding benefits and generous pension program provided by the company. However, employee morale suffers in the production department, which is housed in a separate facility. The physical space is old and less than ideal, with employees working long hours in cramped spaces with poor lighting. Employees have requested changes to the physical plant, but that is not a possibility for at least two more years. In a meeting with his employees, Josiah asked for other solutions to improve their morale and working conditions. Many employees stated that flextime, including the option of working four 10-hour days each week, would make a major difference to them.
Top management approved the production department’s flextime request as long as production did not fall behind, so Josiah implemented the new schedule. The production employees were pleased with the change and morale improved immediately. As morale improved, productivity increased while absenteeism decreased. Josiah and top management viewed the change as a success.
However, employees in other departments heard about the flextime in the production department and demanded they be given the same opportunity. After reviewing the benefits of flextime for the production department, management approved individual departments to arrange flextime schedules where practicable.
As the company made the switch from regular hours to flextime, some unforeseen challenges began to arise. First, there were certain employees, such as the receptionist, who could not avail themselves of flextime because of their job responsibilities. This