Assignment: Ethical Misconduct and Decisions

Ethical misconduct and decisions that damage stakeholders generally impacts the company’s reputation in terms of both investor and consumer confidence. As inves- tor perceptions and decisions begin to take their toll, shareholder value drops, expos- ing the company to consumer scrutiny that can increase the damage.

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32 Part 1: An Overview of Business Ethics

a recent Edelman trust survey, three industries in terms of the lowest level of trust were the media, banks, and financial services; the most trusted industries were tech- nology, automotive, and food and beverage. 9 Reputation is a factor in consumers’ perceptions of product attributes and corporate image and can lead to consumer will- ingness to purchase goods and services at profitable prices. Perceived wrongdoing or questionable behavior may lead to boycotts and aggressive campaigns to dampen sales and earnings. When Apple decided to leave the green registry EPEAT, a government- backed registry that certifies products based on their sustainability, the company did not anticipate the backlash from governments. San Francisco announced it would boycott Apple by no longer purchasing Apple computers for its agencies. Under this pressure, Apple rejoined the registry. 10 New reforms intended to improve corporate accountability and transparency suggest that stakeholders, including regulatory agen- cies, local communities, attorneys, and public accounting firms play a major role in fostering responsible decision making. 11 Stakeholders apply their values and stan- dards to diverse issues, including working conditions, consumer rights, environmental conservation, product safety, and proper information disclosure that may or may not directly affect an individual stakeholder’s own welfare. We can assess the level of social responsibility an organization bears by scrutinizing its effects on the issues of concern to its stakeholders.