Business Ethics - impact of the stakeholders
Business ethics- impact of the stakeholders
As we all know stakeholders have a huge impact on the business but it works both ways. The business and its ethical behaviour also affect the stakeholders and the business itself. Today I am going to evaluate the impact of Sainsbury’s ethical behaviour on its stakeholders and the business.
In 2007 Sainsbury has acted very unethically. They sold around 20,000 cotton bags made by well-known designer. They wanted to make it fashionable to use cotton bags. As a result ‘The Evening Standard’ has revealed that the bags were made in China and the cotton which they used to make the bags was not organic. The aim of the bag was to promote green awareness but Sainsbury has admitted that it was made using cheap labour in China and was not fair traded. In my opinion, this situation had a big impact on the organisation and its stakeholders. At that time, in 2007, Sainsbury was doing all they could in order to become more ethical than any other supermarket. The situation described above has changed customer’s opinion about the company and definitely ruined their ‘ethical’ reputation. Customers were very disappointed as they believed that the company they use to do their shopping is ethical and do not mislead the customers. Instead, they have been lied to and they bought the bags which were not ethical. Another group of the stakeholders seriously affected by the situation were shareholders. They like to invest in the company which is profitable but they also want the company to have a good reputation. In situation like the one described above the company is losing the customers, reputation and the profit at the same time so there will be less stakeholders willing to invest in the company and the existing ones will not be satisfied because they will not earn as much as the company promised. Also, the suppliers will be affected by the fact that Sainsbury acted unethically. There are suppliers which do not want to work with businesses
As we all know stakeholders have a huge impact on the business but it works both ways. The business and its ethical behaviour also affect the stakeholders and the business itself. Today I am going to evaluate the impact of Sainsbury’s ethical behaviour on its stakeholders and the business.
In 2007 Sainsbury has acted very unethically. They sold around 20,000 cotton bags made by well-known designer. They wanted to make it fashionable to use cotton bags. As a result ‘The Evening Standard’ has revealed that the bags were made in China and the cotton which they used to make the bags was not organic. The aim of the bag was to promote green awareness but Sainsbury has admitted that it was made using cheap labour in China and was not fair traded. In my opinion, this situation had a big impact on the organisation and its stakeholders. At that time, in 2007, Sainsbury was doing all they could in order to become more ethical than any other supermarket. The situation described above has changed customer’s opinion about the company and definitely ruined their ‘ethical’ reputation. Customers were very disappointed as they believed that the company they use to do their shopping is ethical and do not mislead the customers. Instead, they have been lied to and they bought the bags which were not ethical. Another group of the stakeholders seriously affected by the situation were shareholders. They like to invest in the company which is profitable but they also want the company to have a good reputation. In situation like the one described above the company is losing the customers, reputation and the profit at the same time so there will be less stakeholders willing to invest in the company and the existing ones will not be satisfied because they will not earn as much as the company promised. Also, the suppliers will be affected by the fact that Sainsbury acted unethically. There are suppliers which do not want to work with businesses