Business Ethics and Corporate Governance, Second Edition

HOW ETHICAL DILEMMAS IN BUSINESS AFFECT THE STAKEHOLDERS?

Ethical dilemmas in business can be best explained by the triangle in Fig. 10.2 with the stakeholders as its vertices. The stakeholders in this case can be broadly classified into shareholders, employees and the society at large.

Shareholders are the real owners of the company through their shareholdings in the firm. They expect a decent return on their investments (ROI). Corporations have to repay them for the opportunity costs they have incurred in investing in their firm. They have to be compensated through dividends, bonuses, bonus shares etc. In many corporations, the management is predominantly loaded with promoter family members holding a few shares. For instance, before the Indian ...