Ethics And Social Responsibilty Assignment

1910 Words Apr 8th, 2015 8 Pages
ETHICS AND SOCIAL RESPONSIBILTY ASSIGNMENT
1.1 A stakeholder of a company is an individual or group which either; is hurt by, or profits from, the enterprise; or whose rights can be abused or must be regarded by the organization.(Crane and Matten,2007: 57) In the financial crisis case study, one can safely identify shareholders, bank customers and government as some of the stakeholders who are affected by the banking sector crisis triggered by the egoistic need to make a return on capital and deregulations. Having identified the stakeholders, the harms and benefits as it has affected these stakeholders are discussed as follows and future recommendations suggested.
Using the stakeholders’ theory suggested by Evan and Freeman (1993) cited in Crane and Matten (2010: 61-62). The two simple principles of corporate rights and corporate effects were not adhered to. The bank action violates the rights of the shareholders to information by hidden the truth about the underlying weakness in their financial position. The fiduciary relationship of bankers with the shareholders can also be said to have been violated thereby causing negative consequences of loss of investment, diminishing long term share price and state ownership of banks for example the Royal Bank of Scotland takeover.
Bank customers were negatively affected through harder to get loan, falling value of housing market, tight regulation, higher taxation and cut in public expenditures. However, the benefit is that bank…
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