USA: +1(669)289-8683 
Sign in
I will provide an Ethics Case Study, which you must read and build a SIMAC analysis based on. I will also include a word doc with a clear example of what is expected to be done for the SIMAC analysis and a PowerPoint that talks about SIMAC in case something is unclear. Please follow the format exactly as it is presented.
Layout:
S- Stakeholder
Identify who the stakeholders are in the issue
I-Issue
Create a question on what the issue is (for example: is it ethical to use in clothing)
M- Model (answer each model in bullet point format)
Kantian (duty-based)
Virtue (virtues-based)
The analysis is the breakdown provided in all the models (aka the bullet points)
C – Conclusion
1
SIMAC Assignment
Name
School
Class
Professor
Date
2
SIMAC Assignment
S- Stakeholder
Several stakeholders have a claim on the issue. They include
➢
Meeker (The warehouse that Randy and Cheryl work in)
➢
Consumers of the expired medication
Regarding the issue, Meeker, the company has to reduce losses based on the expired
medicines that must be returned, and the discounts are given to their loyal customers in case of
the expiry of the given medication. They have to maintain a competitive edge over their
competitors in the market. Cheryl’s stakes on the issue are that she has to find ways to reduce the
losses. She is a supervisor in the pharmaceutical company and thus is affected positively and
negatively based on the company’s performance. Cheryl, as the supervisor, is more liable as she
has to find means of reducing losses in the entity. Randy is a stakeholder in the business as he is
employed, and the company’s success affects him. The hospitals and clinics are also stakeholders
as they rely on the company for their pharmaceutical products, which are vital to their services.
The people taking the medication are at risk because they consume falsely promoted
products. They are in a transaction with Meeker, who are promoting expired products, which will
lead to issues for the consumer.
3
I-Issue
Is it ethical for Randy to replace all expired supplies and equipment labels with new ones
at the clinics and hospitals to prevent their warehouse from accruing losses and aid in
maintaining a competitive edge in the market?
M- Model
•
Utilitarianism (outcome-based)
Based on the theory, one takes an action that consistently promotes the greatest good for
the more significant number of people. Some of the critical questions that Randy will need will
include
➢
The number of people to benefit from his changing the labels
➢
What are some of the damages that the company will accrue from his
•
Kantian (duty-based)
move?
When adopting Kantian ethics, it is fair to ensure that fundamental human rights are not
violated. Some of the critical questions posed will include the following:
➢
Would Randy want anyone in the same position to approve changing the
labels despite expired products?
➢
What human rights will he violate by changing the labels?
•
Virtue (virtues-based)
4
When adopting the virtue-based model, one takes actions that promote the desired
virtues. Some of the critical questions to be posed will include the following.
➢ Is it honest to replace the old expired labels with new labels?
➢ Are the actions fair to the consumers who will eventually take medicine?
A- Analysis
Utilitarianism
Stakeholder: Meeker (The warehouse that Randy and Cheryl work in)
Pros:
•
•
•
•
•
•
The employees supplying the pharmaceutical products will generate more money
through sales
Increase in available inventory count
Increase in market share
Will have the ability to maintain their competitive advantage
There will be less waste
Increase revenue through sales
Cons:
•
•
•
•
•
•
Can result in a lawsuit
This could bring unwanted attention to the hospital by the administration
Inaccurate representation to the consumer about the product
It is unethical for the business to conduct such actions
The expired medication can decrease the ability to work
Increased loss in profit
Stakeholder: Consumers of the expired medication
Pros:
• Receive credit for expired return
Cons:
• Consumers will be at a health risk from using the expired drug
• Possible chance of the health issue not going away due to expired drug
• Promoting false information
• Possible risk of gaining other health deficiencies from expired medication
• Lost trust in the medical industry
5
Kantian
With Kantian ethics, the question is whether the move violates fundamental human
rights. It is critical to note that all individuals have a right to appropriate medical care. Cheryl
highlighted that the medicine would lose value, which would be against fundamental rights.
Randy will also not want to be in a position where his health is at risk, which will be vital in his
decision-making. Consumers are not given the correct information before purchase, which is an
unethical act by the business. Humans have the right to know the truth in any situation. The
Meeker company does not present the truth in this scenario, which affects fundamental human
rights.
Virtue
Based on the virtue-based model, one must align with the virtues expected in society. It is
not honest to replace. Despite the profit accrued from changing the labels, it is not just to sell
products on self-pretense, an aspect that Randy has to acknowledge before making a decision.
The honesty in giving expired medicines to individuals who rely on health experts that have been
duped will also not be an aspect that Randy should condone. If randy knows the product is being
experienced, it is not virtuous for him to change the date. In conclusion, it is dishonest to sell a
product knowing it may harm a consumer intentionally.
C – Conclusion
Based on the discussion and an analysis of the three different models, it is vital to
highlight that the issue is not ethical, and it is only fair for Randy not to approve the move. The
organization must ensure that they enhance the standard of living of its customers. To ensure
6
ethics, it is only fair for Randy to ensure that he is key in fostering ethical behavior, which will
be key in ensuring that they are in a position to enhance ethical behavior in the long run. The
company will be better positioned to prevent expired product lawsuits. The issue is thus
unethical, and Randy should not pursue the given point.
Based on the analysis developed through the three different models, it can be assumed that it is
ethical for fur and leather to be used for consumer goods. Since it is not believed that the animals
are considered to be primary stakeholders, the models conclude that using fur and leather will
benefit the stakeholders. Regarding LVMH, there is no unethical usage of fur since it will also
help humans over animals. Humans are viewed to be more valuable than animal’s life.
CBA 400 – Business Ethics
Week 3 – Chapter 2
Class Objectives
1. Discuss philosophical models of ethics
2. Understand the SIMAC approach to ethical decision-making
3. Identify the various stakeholders that can be affected
Ethics Overview
Ethics is the study of right and wrong behavior; whether an action is fair,
right or just.
In business, ethical decisions are the application of moral and ethical
principles to the marketplace and workplace.
SIMAC
A Systematic Approach of applying ethics– SIMAC
S – Stakeholders
I – Issues
Systemic
Corporate
Individual
M – Models
A – Analysis
C – Conclusion
Approaches to Ethical Reasoning
Ethical reasoning, which is the application of morals and ethics to a given
situation, can be duty-based or outcome-based (or apply both).
Outcome-based: the ethical decision is the one that does the most good to the most
stakeholders.
Duty-based: when making a decision, you must account for inherent rights.
Virtues-based: when making a decision, you should act in a way that upholds certain
virtues.
Outcome-based models: Utilitarianism
Utilitarianism: the best course of action is the one that promotes the
greatest good for the greatest number of people.
Ex: the trolley problem
Cost-benefit analysis: weighing the pros and cons of an action. The
side with more pros should be followed.
Pros and cons can have different weights, so it’s not just number of
people, it accounts for extent of damage/benefit.
Ex: Would you slap 1 million people of somehow that could save 1
person’s life?
Weaknesses to Utilitarianism
Hard to place a value on some outcomes
Disagreement over whether something is a cost or a benefit
Easy to use to justify doing terrible things
Ex: the eternal shriek (17:45 remaining)
Becoming a happiness pump (15:08 remaining)
Duty-based model: Kantian Ethics
Duty-Based Ethics: When making an ethical decision, you must not violate fundamental rights
The principle of rights
People have certain fundamental liberties which must be respected.
Right is something an individual is entitled to
Can come from legal rules, religion, philosophy
Kantian Ethics:
Do not treat people as a means to an end
Categorical imperative – only act on reasons we would be willing to have anyone in a similar situation act on
Requires reversibility and universalizability
Weaknesses of duty-based models
What do you do when two rights conflict?
Does not take into effect utility that may be gained from violating a
right
Ex: anti-vaxxers
Ex: harmless right violation?
How do you know a right exists?
Virtue based ethics
Virtues – when acting, you should take whichever action displays or promotes desired
virtues
Justice, fairness, generosity, honesty, etc
Your character should not vary based on the actions of those around you
Snake and the fire parable
Weaknesses of Virtue Based Ethics
Upholding virtues can disregard outcomes
Ex: To tell the truth (11 minutes in)
You may get taken advantage of or help destructive causes
Can get a reputation for not having good discretion
Ex: Being too nice
Conclusions
All of the various models have some good points and some points that
don’t always work
Try analyzing an ethical decision under all models and, it outcomes
conflict, choose the one most appropriate for the situation
Try to be unbiased – don’t just pick a model that reinforces the outcome
you already want
Stakeholder Relationships,
Social Responsibility, and
Corporate Governance
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Icebreaker
What does the term “stakeholder” mean to you?
Social responsibility is an organization’s obligation to maximize
its positive impact on stakeholders and minimize its negative
impact. Can you think of any companies that are socially
responsible?
Stakeholders Define
Ethical Issues in Business
2-1
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Stakeholders Define Ethical Issues in Business 1 of 6
Stakeholders – Those who have a “stake” or claim in some aspect of a
company’s products, operations, markets, industry, and outcomes
• Customers
• Shareholders
• Employees
• Suppliers
• Government Agencies
• Communities
Stakeholders Define Ethical Issues in Business 2 of 6
Normative – Identifies ethical guidelines that dictate how
firms should treat stakeholders
Descriptive – Focuses on the firm’s behavior; addresses how
decisions are made for stakeholder relationships
Instrumental – Describes what happens if firms behave in a
particular way
FIGURE 2-1 The Impact of a
Strong Organizational Culture
Stakeholders Define Ethical Issues in Business 3 of 6
Identifying Stakeholders
Primary stakeholders – Those whose continued association and resources are
absolutely necessary for a firm’s survival
Employees, customers, and shareholders, as well as the governments and
communities that provide necessary infrastructure
Secondary stakeholders – Stakeholders who do not typically engage directly in
transactions with a company and are therefore not essential to its survival
Media, trade associations, and special interest groups
Stakeholder interaction model – This approach recognizes other stakeholders
and explicitly acknowledges that dialogue exists between a firm’s internal and
external environments.
FIGURE 2-2
Interactions
Between a
Company and
Its Primary and
Secondary
Stakeholders
Stakeholders Define Ethical Issues in Business 4 of 6
A Stakeholder Orientation
Stakeholder orientation – The degree to which a
firm understands and addresses stakeholder
demands
Activities that address stakeholder demands
include:
Organization-wide generation of data about stakeholder groups and
assessment of the firm’s effects on these groups
Distribution of this information throughout the firm
Responsiveness of the organization as a whole to this information
Stakeholders Define Ethical Issues in Business 5 of 6
To generate data about stakeholders:
Identify
relevant
stakeholders
Identify
concerns about
the business
that are
relevant to
each
stakeholder
group
Evaluate their
impact on the
issues of
importance to
the various
stakeholders
identified
Stakeholders Define Ethical Issues in Business 6 of 6
It is essential for information gathered to be circulated throughout the firm.
A stakeholder orientation is not complete without including activities that address
stakeholder issues.
Activities are likely specific to a particular stakeholder group or issue.
Firms are likely to adopt a stakeholder orientation to varying degrees.
To gauge a firm’s stakeholder orientation, evaluate:
The extent the firm adopts behaviors that typify the generation and dissemination
of stakeholder intelligence
The responsiveness to this intelligence
Knowledge
Check
Question: Shareholders
are what type of
stakeholders?
Social Responsibility
and Business Ethics
2-2
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Social Responsibility and Business Ethics 1 of 2
• Ethics and social responsibility are not the same but are interrelated.
– Social responsibility is an organization’s obligation to maximize its positive impact on
stakeholders and minimize its negative impact.
• There are four levels of social responsibility:
Economic
Legal
Ethical
Philanthropic
Social Responsibility and Business Ethics 2 of 2
Corporate citizenship – The extent to which businesses strategically meet the economic, legal,
ethical, and philanthropic responsibilities placed on them by various stakeholders
Four interrelated dimensions:
Strong sustained economic performance
Rigorous compliance
Ethical actions beyond what the law requires
Voluntary contributions that advance the reputation and stakeholder commitment of the
organization
Reputation – A corporation’s image and an intangible asset with tangible value
Issues in Social
Responsibility
2-3
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Issues in Social Responsibility 1 of 2
Social responsibility rests on a stakeholder orientation.
Each stakeholder is given due consideration.
Long-term relationships with stakeholders develop trust,
loyalty, and the performance necessary to maintain
profitability.
Social issues are associated with the common good.
These can relate directly or indirectly to business.
Issues in Social Responsibility 2 of 2
Major issues today include data privacy, consumer
protection, sustainability, and corporate governance.
Corporate governance – The development of formal
systems of accountability, oversight, and control
Strong corporate governance mechanisms remove
the opportunity for employees to make unethical
decisions.
Social Responsibility
and the Importance
of a Stakeholder Orientation
2-4
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Social Responsibility and the Importance
of a Stakeholder Orientation 1 of 1
Legal and economic responsibilities are generally accepted
as the most important determinants of performance.
Economist Milton Friedman suggests the market is a better
deterrent to wrongdoing than new laws and regulations.
Adam Smith, founder of capitalism, said each individual has
to produce for the common good.
Smith established normative expectations for motives
and behaviors in his theories about the invisible hand.
Evidence suggests caring about the well-being of
stakeholders leads to increased profits.
Debate Issue: Take a Stand
Is it acceptable to promote a socially irresponsible—but legal—product to
stakeholders?
For example, Ashley Madison, a dating website, encourages married
individuals to have an affair. With the motto “Life Is Short. Have an Affair,”
the website has had more than 60 million members worldwide over its
lifetime.
Take a stand:
There is nothing wrong in providing a legal service many people desire.
From a stakeholder perspective, it is wrong to provide socially irresponsible
services.
Corporate Governance Provides
Formalized Responsibility to
Stakeholders
2-5
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Corporate Governance Provides Formalized
Responsibility to Stakeholders 1 of 8
Most businesses operate under the assumption that the purpose of
business is to maximize profits for shareholders.
The stakeholder model places the board of directors in the position of
balancing the interests and conflicts of a company’s various
constituencies.
External control of a corporation resides with government regulators
and key stakeholders (e.g., employees, consumers, and communities).
Stakeholders exert pressure on the organization for responsible
conduct.
Social responsibility activities have a positive impact on consumer
identification with an attitude toward the brand.
Corporate Governance Provides Formalized
Responsibility to Stakeholders 2 of 8
Fiduciaries are persons placed in positions of trust that act on behalf of
the best interests of the organization (e.g., directors and officers of
corporations).
Directors are not generally held responsible for negative
outcomes if they have been informed and are diligent in their
decision making.
Duty of care (duty of diligence) – The legal obligation of an
individual or organization to make informed and prudent decisions
and avoid behavior that could cause harm to others
Duty of loyalty – The obligation of individuals to make decisions
that are in the best interest of the corporation and its stakeholders
Corporate Governance Provides Formalized
Responsibility to Stakeholders 3 of 8
Accountability – How closely workplace decisions align with
a firm’s stated strategic direction and its compliance with
ethical and legal considerations
Oversight – Provides a system of checks and balances that
limit employees’ and managers’ opportunities to deviate
from policies and strategies aimed at preventing unethical
and illegal activities
Control – Process of auditing, improving organizational
decisions and actions
Corporate Governance Provides Formalized
Responsibility to Stakeholders 4 of 8
Corporate governance establishes fundamental systems and
processes for:
Preventing and detecting misconduct
Investigating and disciplining
Recovery and continuous improvement
The development of a stakeholder orientation should interface
with the corporation’s governance structure.
Corporate governance normally involves strategic decisions
and actions by boards of directors, business owners, top
executives, and other managers with high levels of authority
and accountability.
Corporate Governance Provides Formalized
Responsibility to Stakeholders 5 of 8
Views of Corporate Governance
Shareholder model of corporate governance – Founded in
classic economic precepts, including the goal of
maximizing wealth for investors and owners
For publicly traded firms, corporate governance focuses
on developing and improving the formal system for
maintaining performance accountability between top
management and the firm’s shareholders.
Stakeholder model of corporate governance – A broader
view of the purpose of business that considers stakeholder
welfare in tandem with corporate needs and interests
Corporate Governance Provides Formalized
Responsibility to Stakeholders 6 of 8
The Role of Boards of Directors
Boards of directors hold the ultimate responsibility for their firms’
success or failure, as well as the ethics of their actions.
FSGO holds them accountable for creating an ethical
culture that provides leadership, values, and compliance.
Assume legal responsibility for the firm’s resources and
decision
Responsible for appointing top executive officers
There is a new emphasis on accountability for board members.
Corporate Governance Provides Formalized
Responsibility to Stakeholders 7 of 8
Greater Demand for Accountability and Transparency
Directors are increasingly chosen for their expertise,
competence, and ability to bring diverse perspectives to
strategic discussions.
Outside directors do not have a vested interest.
Interlocking directorate — The concept of board members
being linked to more than one company
Legal unless it involves a direct competitor
Corporate Governance Provides Formalized
Responsibility to Stakeholders 8 of 8
Executive Compensation
Executive compensation – How executives are compensated for their
leadership, organizational service, and performance
Was influenced by internal equity (how executive pay relates to employee
pay)
Shifted to a system of external equity (what CEOs at other companies are
paid)
Caused executive compensation to increase
Ratio of the salaries of the highest-paid executives to the median
employee wage should be less
Stakeholders support a high level of compensation only when it is linked to
strong company performance
Discussion Activity
What are current topics in governance?
What areas do you think should or will become hot topics in the
near future?
Discussion Activity Debrief
Are the topics you discussed listed below? What would you add to this list?
Environmental, social, and governance oversight
Human capital management
Audit committee oversight of internal controls
Corporate culture
Whistle-blower protections
Board diversity
Representation of women on boards
Hedging policy disclosure rules
Implementing a
Stakeholder Perspective
2-6
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Implementing a Stakeholder Perspective 1 of 3
Step 1: Assessing the Corporate Culture
Identify the organizational mission, values, norms, and behavior likely to have implications
for social responsibility
Step 2: Identifying Stakeholder Groups
Recognize stakeholder needs, wants, and desires
Step 3: Identifying Stakeholder Issues
Level of stakeholders’ power and legitimacy determines degree of urgency
Implementing a Stakeholder Perspective 2 of 3
Step 4: Assessing Organizational Commitment to Stakeholders
and Social Responsibility
Used to evaluate current practices and to select concrete social responsibility initiatives
Social responsibility disclosures in company annual reports are directly related to the quality
of corporate governance.
Step 5: Identifying Resources and Determining Urgency
Two main criteria: (1) Level of financial and organizational investments required by different
actions and (2) urgency when prioritizing social responsibility challenges
When the challenge under consideration is viewed as significant and stakeholder pressures
on the issue can be expected, the challenge is considered urgent.
Implementing a Stakeholder Perspective 3 of 3
Step 6: Gaining Stakeholder Feedback
A general assessment of a firm and its practices can be obtained through satisfaction or
reputation surveys.
To gauge stakeholders’ perceptions of a firm’s contributions to specific issues, stakeholdergenerated media such as blogs, websites, podcasts, and newsletters can be assessed.
Formal research may be conducted using focus groups, observation, and surveys.
Contributions of a
Stakeholder Perspective
2-7
O.C. Ferrell, John Fraedrich, and Linda Ferrell, Business Ethics: Ethical Decision Making and Cases, 13th Edition. ©2022 Cengage.
All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Contributions
of a
Stakeholder
Perspective
While we provide a framework for
implementing a stakeholder
perspective, balancing stakeholder
interests requires information and good
judgment.
When businesses attempt to provide
what consumers want, broader
societal interests can create conflicts.
Balancing stakeholder interests can be
a challenging process.
