Businesses and governments operate in changing technological, legal, eco-nomic, social, and political environments with competing stakeholders andpower claims. As the opening story shows, there is more than one side toevery complex issue and debate involving businesses, consumers, families,other institutions, and professionals. When stakeholders and companiescannot agree or negotiate competing claims among themselves, the issuesgenerally go to the courts. The RIAA, in the opening case, does not wish toalienate too many college students because they are also the music industry’sbest customers. At the same time, the association believes it must protectthose groups it represents. Also, not all stakeholders in this controversyagree on goals and strategies. For example, not all music artists oppose stu-dents downloading or even sharing some of their copyrighted songs. Offer-ing free access to some songs is a good advertising tactic. On the other hand,shouldn’t those songwriters and recording companies who spend their timeand money creating, marketing, distributing, and selling their intellectualproperty protect that property? Is file sharing, without limits or boundaries,stealing other people’s property? If not, what is this practice to be called?On the other hand, if file sharing continues in some type of form, and if itdoes help sell large numbers of labels for many artists, will this “practice”become legitimate? While the debate continues, individuals (15 years oldand younger in many cases) who illegally share files also have rights as pri-vate citizens under the law, and recording companies have rights of propertyprotection. Who is right and who is wrong, especially when two rights col-lide? Who stands to lose and gain from this case? Who gets hurt by thesetransactions? Which group’s ethical positions are most defensible?Stakeholders are individuals, companies, groups, and even nations thatcause and respond to external issues, opportunities, and threats. Corpo-rate scandals, globalization, deregulation, mergers, technology, and globalterrorism have accelerated the rate of change and the uncertainty in whichstakeholders must make business and moral decisions. Issues concerningquestionable ethical and illegal business practices confront everyone, as thefollowing examples illustrate:The subprime lending crisis is one of the latest business scandals. Consum-ers, banks, mortgage companies, real estate firms, home owners, and a hostof other stakeholders were involved. Many of those who were sold mort-gages were lied to about low-risk, high-return products. “On January 17th,Merrill Lynch announced its largest loss ever—$9.8 billion for the fourthquarter of 2007. This came as a result of a write down of the value of certainassets held by the company—a $16.7 billion loss in book value. The assetshad been purchased as part of the subprime mortgage bonanza of a fewyears ago.” This crisis is contributing to the entire U.S. economy’s tilting tothe brink of recession. Another corporate scandal—this time it’s worse!3The corporate scandals at Enron, Adelphia, Halliburton, MCI WorldCom,Tyco, Arthur Andersen, Global Crossing, Dynergy, Qwest, Merrill Lynch,and other firms jarred shareholder and public confidence in Wall Street• • 4Business Ethics and corporate governance. “Only 18% of Americans express a great dealor quite a lot of confidence in big business, compared to 59% who expressconfidence in small business. Confidence in big business has never beenhigh, reaching its maximum of 34% in 1974. Even in the halcyon days ofthe dot.com boom in the late 1990s, only 30% of Americans expressed agreat deal or quite a lot of confidence in big business. The current 18%confidence rating in big business is the same as last year, and remains thelowest in Gallup history.”
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