As businesses emerge as some of the most powerful institutions in the world, business ethics have never been more important, and given very recent history, more open to question. Corporations are relative newcomers to power, and for evidence of this we can look to Europe, where the oldest, largest, most elaborate buildings are the churches and cathedrals. For thousands of years, the church and its leaders were arguably the most powerful institution, but as the liberal notions of the Enlightenment supplanted church orthodoxy, the state supplanted religion as the more powerful institution. But at the dawn of the third millennium, the newest, grandest buildings are the corporate headquarters and facilities, an architectural phenomenon that neatly illustrates the transfer of power through history.

It is not clear, however, that the business community has lived up to its obligations and responsibilities in proportion to its rapid increase in power. Witness the number of organizations and executives that are being exposed for immoral and fraudulent conduct. This is why the time is ripe for an in-depth examination of ethics in business. In this article, I will apply the principles of stakeholder theory to discuss questions that are central to the business ethics debate, specifically:

  • Why should managers pay attention to stakeholders?
  • Who are an organization’s stakeholders and what is the basis for their legitimacy?
  • What do stakeholders want?
  • How should managers prioritize among stakeholders?
  • Are the ethics of business different from everyday ethics? If so, how and why?

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Copyright © 2004 Ivey Publishing. This article first appeared in Ivey Business Journal, March/April 2004.

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