Encyclopedia of Business and Professional Ethics

Running head: BUSINESS AND PROFESSIONAL ETHICS
BUSINESS AND PROFESSIONAL ETHICS
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BUSINESS AND PROFESSIONAL ETHICS1
Question 1
a) What does Goodpaster mean by ‘strategic stakeholder synthesis’? Why does
he think that businesses that operate according to the principles of strategic
stakeholder synthesis do not really introduce ethical values into business
decision making?
According to Goodpaster, strategic stakeholder synthesis is when an organisation
identifies the stakeholders who have a high influence in their organisation and then included in
the decision making process of the organisation (Goodpaster, 1991).
Goodpaster, (1991) states that organisations that consider strategic stakeholder synthesis
do not need to introduce ethical values in the decision making process of a business as they only
include the stakeholders in the decision making process assessing their importance to the
business and do not consider other stakeholders who cannot effect the business in any kind of
way which means they only consider someone based on their own profit.
b) Goodpaster argues that we need an approach to business ethics that avoids
business without ethics (strategic stakeholder synthesis) and ethics without
business (a multi-fiduciary stakeholder approach). Explain Goodpaster’s
nonfiduciary approach to business obligations, making sure you distinguish it
from both the multifiduciary stakeholder approach and the strategic
stakeholder approach.
(Goodpaster, 1991) provides a nonfiduciary approach which is the Nemo Dat Principle
where the shareholders cannot expect the manager of an organisation to be less people and make

BUSINESS AND PROFESSIONAL ETHICS2
sure ethical. Companies always do not have to consider ethical expectations of the communities
because they have generally built according to the demands of the consumers thus managers
need to consider how to make profits.
The approach suggested is better than the multifiduciary stakeholder approach as
organisations do not have any nonfiduciary obligations to any third parties which revolve around
fiduciary relationships and it is also better than the strategic stakeholder approach where the
organisations do not include stakeholders with low influence in their decision making process
sometimes making organisations selfish.
c) Does Goodpaster’s nonfiduciary account of business obligations provide
sufficient protection for the interests of stakeholders other than
shareholders? Does it avoid the problem of treating stakeholders as mere
means to corporate ends? Give reasons for your answer.
The non-fiduciary account of business obligations that is suggested by Goodpaster is to some
extent sufficient in protecting the interest of the stakeholders as they products and services of an
organisation are already developed in a way in order to cater to the needs of the consumers
which automatically make it ethical.
This to some extent helps in avoiding the issue of treating stakeholders as a mere means to
corporate ends as considering the needs of the customers helps to satisfy the needs of the
customers which also paves way for building of a positive relationship between the stakeholders
and the organisation.