Question

Define the word and then write one personal sentence to demonstrate your understanding by accurately using the word in the sentence. a. Stakeholder: b. Integrity c. Conflict of interest: d. Ethical issue: e. Ethical dilemma:

Answer 1

Stakeholder: Stakeholder is any person or organization which has an interest in the functioning of the business. This may include customers, vendors, employees and shareholders etc.

Example: The public policy change by the government was opposed by many firms as it was harming their interest as a stakeholder.

Integrity: Integrity is the quality of a person or organization of being honest. This is characterized by an alignment between one’s commitment and actions.

Example: A successful firm has one of key characteristics as integrity.

Conflict of interest: It is the situation where in a certain situation, the interest of two or more parties is not met.

Example: The banks wish a borrower firm to take lower risk in operating its business. However, the shareholders wish that the firm takes a higher risk for generating higher returns.

Ethical issue: It is the situation where the person or organization has to choose between choices which are generally evaluated as wrong/unethical or right/ethical.

Example: Sam pitched an inferior product to the customer as he himself was getting more incentives for the same.

Ethical Dilemma: It is the situation where the choice has to be made between options, all of which pertain to outcomes which negatively affect certain stakeholders.

Example: Sam offered a sub-quality product to the customer as he was given instructions by his manager.