Match each of the director’s viewpoints in the case study with the corresponding academic below
who advocated for that viewpoint as per Business Ethics 6th Edition, Chapter 7:
• Milton Friedman
• Christopher Stone
• Peter French
• Edward Freeman
• Kenneth Goodpaster
Structure your answer as follows:
Director in case study
Sally Setene
Corresponding academic who reflects the
director’s viewpoint
Margaret Molefe
Bryan Butan
Themba Tshwete
Ganitha Ginwala
1.2 With whom of the 5 academics in 1.1. above about the role of the modern corporation in society
do you agree with most? I.e. whose viewpoint do you support most or aligns the best with your
own stance about the role of the modern corporation? Select one person only and explain your
answer in detail. Note that this question does not require you to agree 100% with any of the
academics: only the one you agree with most.
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1.3 Explain why potential problems could arise if Dithaba were to implement the views of Mr Bryan
Butan, and thereby run the company according to his stance of treating all stakeholders exactly
equally. Include reference to the needs and expectations of the following stakeholders in your
answer: shareholders, employees, customers, tax authorities.
1.4 Create arguments as to why companies themselves should be held morally liable for the decisions
taken by individuals in the company, instead of holding only the human decision-makers liable.
1.5 State possible consequences for Dithaba Construction if the conflicting views of the directors about
the strategic direction of the company are not resolved.
Question 2
2.1 Imagine you are a shareholder with a significant shareholding in a large company listed on the
JSE. Assume you are invested for long-term gains (say, five years plus) and NOT for short-term
gains (say, less than one year). Describe, for each of the following stakeholders, why it could be in
your best long-term financial interest if the company you have invested in ensures that the
legitimate needs of each of these stakeholders are met. Assume no conflict of needs between
these stakeholders. Structure your answer as follows:
Stakeholder
Reasons why their legitimate needs should be met for the
sake of growth on my long-term investment in the Co.
Employees
Customers
Suppliers
Natural environment
2.2 In your personal opinion, do you think South African companies, in general, care about the
legitimate needs of society (customers, communities, etc.) and the natural environment (habitat
protection, wildlife protection, minimising pollution and waste, etc.)? Elaborate on your answer.
Director in case study
Margaret Molefe – Milton Friedman
Bryan Butan – Peter French
Themba Tshwete – Edward Freeman
Ganitha Ginwala – Kenneth Goodpaster
1.2 I align most with the viewpoint of Edward Freeman. I believe that a company should consider the interests of all stakeholders, not just shareholders. By taking into account the needs and expectations of employees, customers, suppliers, and the community, a company can create long-term sustainable success. This approach not only benefits the stakeholders but also contributes to the company's reputation and overall success in the long run.
1.3 Potential problems could arise if Dithaba were to implement the views of Mr. Bryan Butan and treat all stakeholders equally. Shareholders may be concerned that their interests are not being prioritized, leading to a decrease in investment and potential financial instability. Employees may feel undervalued if their needs are not adequately addressed, leading to low morale and decreased productivity. Customers may not receive the level of service they expect, resulting in loss of business. Tax authorities may question the company's financial management if stakeholders are not treated appropriately.
1.4 Companies should be held morally liable for the decisions taken by individuals within the company to ensure accountability and ethical behavior. By holding the company responsible, it encourages a culture of transparency and integrity within the organization. This approach also considers the collective impact of decisions on all stakeholders, rather than focusing solely on individual decision-makers.
1.5 If the conflicting views of the directors about the strategic direction of the company are not resolved, Dithaba Construction may face internal discord and confusion. This can lead to a lack of clear direction, inefficiency in decision-making, and ultimately harm the company's reputation and financial performance.
2.1
Employees - Ensuring the needs of employees are met promotes loyalty, productivity, and overall well-being, leading to a positive work environment and reduced turnover costs.
Customers - Meeting the needs of customers leads to repeat business, positive word-of-mouth referrals, and brand loyalty, ultimately driving sales and revenue growth.
Suppliers - Building strong relationships with suppliers ensures a steady and reliable supply chain, reducing risks and costs associated with disruptions.
Natural environment - Protecting the environment not only aligns with social responsibility but can also lead to cost savings through energy efficiency, waste reduction, and sustainable practices.
2.2 In my personal opinion, I believe that some South African companies do care about the legitimate needs of society and the natural environment. However, there is still room for improvement in terms of corporate social responsibility and sustainable practices. Many companies are starting to integrate these considerations into their business strategies, but there is a need for more widespread adoption and commitment to addressing societal and environmental challenges.