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favourable PR； or in the case of low…cost housing； providing amenities is a
usual requirement in ge。。ing planning consent for a property development
or a site for； say； a supermarket。
UNILEVER – EMBEDDING ETHICS
In 1887； William Hesketh Lever； already a highly successful soap manufacturer；
was looking for a new site for his factory to allow him to expand。
The site also needed to be near a river for importing raw materials； and
near a railway line for transporting the finished products。 The 56 acres
of unused marshy land at the site that became Port Sunlight； named
after his soap； was far more than he needed simply for manufacturing
purposes。 Lever had something more all…embracing in mind。 His stated
aims were to create an environment that allowed his workers ‘to
socialize and Christianize business relations and get back to that close
family brotherhood that existed in the good old days of hand labour’。
His intention was to extend his responsibilities beyond making money for
himself and to share that； albeit on his own terms； with everyone who
worked for him。 Between 1899 and 1914 Lever built some 800 houses；
taking an active part himself in the design。 The munity’s population
of 3；500 shared allotments； public buildings； including the Lady Lever Art
Gallery； schools； a concert hall； open air swimming pool； church； and a
temperance hotel。 His cottage hospital； built in 1907； continued until the
introduction of the National Health Service in 1948。 He also introduced
schemes for welfare； education and the entertainment of his workers；
and encouraged recreation and organizations which promoted art；
literature； science or music。
Unilever； as the pany is now known； has carried the Lever values
and vision on into corporate life。 The pany’s behaviour in all affairs
is governed by a set of clear； stated and municated guidelines。
Starting with its core value； ‘As a multi…local multinational we aim to
play our part in addressing global environmental and social concerns
through our own actions； and working in partnership with stakeholders
at local； national and international levels’； the pany has developed
a prehensive set of principles to guide its behaviour in all aspects of
its work。 The guidelines it expects employees to work to include always
working with integrity with ‘the highest standards of corporate behaviour
towards everyone we work with； the munities we touch； and the
environment on which we have an impact’。 The full value statement
can be seen on its website at this link （unilever/ourvalues）。
226 The Thirty…Day MBA
UNDERSTANDING STAKEHOLDERS
So we can see that directors and by extension the managers of an organization
first saw that their primary； o。。en their only； responsibility was to
look a。。er the shareholders’ interests。 Measures were； and still are； taken
to a。。empt to ally their interests； for example linking bonuses to share
price or profits。 For the most part these a。。empts have failed； as the case
of Enron showed； where shareholders were systematically deceived。 Also；
in the whole sub…prime debacle bankers were rewarded for systematically
repackaging toxic loans and spreading them in near…undetectable layers
around the globe； to the eventual detriment of their shareholders and the
taxpaying public at large who had to pick up the bill。 But even where it is
possible to ally directors’ interests with those of shareholders； that leaves a
myriad of other interested parties effectively disenfranchised； except in so
far as they are expressly protected by laws。
The idea that businesses had a responsibility other than to shareholders
was brought to popular a。。ention in Howard R Bowen’s book Social Responsibilities
of the Businessman （1953； New York： Harper and Brothers）； but it
was a decade later before the term ‘stakeholder’ was coined in an internal
memorandum at the Stanford Research Institute in 1963。 Over the next
two decades the term stakeholder was debated and defined until Edward
Freeman； a professor at the Darden School of Business （darden。
virginia。edu）； University of Virginia； in his book Strategic Management： A
Stakeholder Approach （1984； United States： Pitman Bowen）； set out simple
guidelines that anyone in an organization could understand and follow。
Freeman’s stakeholders were defined as ‘any group or individual who can
affect or is affected by the achievement of the organization’s objectives’。
MAPPING OUT THE STAKEHOLDERS
Freeman （see above） divided stakeholders into six distinct categories； owners；
employees； customers； suppliers； munities and governments； with
which an organization has varying responsibilities or ‘social contracts’。 The
first step in the process of developing an ethical strategy is to identify all the
people； institutions and agencies that your organization is likely to impinge
on in the normal course of its activities。
Figure 9。1 gives an example of a stakeholder map。 It shows how stakeholders
move outwards from the individual at the centre； to internal groups
including their immediate work environment； colleagues； team and peers；
and on to external groups； suppliers； customers； shareholders and eventually
on to ever…distant publics and organizations。
Ethics and Social Responsibility 227
ASSESSING OBLIGATIONS
Not all stakeholders will be affected by any one particular strategy or course
of action； nor will those that are affected be affected to the same degree。 So
the next step in the process is to see which stakeholders will be affected and
to what degree。 This can be done using a Stakeholder Relevance Matrix； as
in Figure 9。2。 This shows which stakeholder groups will be affected by the
decision to relocate a production unit to a new lower…cost country。
Figure 9。1 Stakeholder mapping
You
Organization
Shareholders
Customers
Suppliers
Government
petitors
Department
Teams
Peers
Town/Immediate Neighbourhood
Your Country/Region
Other Countries and Regions
Industry/ business sector
International governments
Wider publics affected
Figure 9。2 Stakeholder relevance matrix
Pro