Ethics Terms

Boundary-spanning departments

departments, or offices, within an organization that reach across the dividing line that separates the company from groups and people in society

Business

any organization that is engaged in making a product or providing a service for a profit.

External stakeholder

Individuals or groups that may important transactions with a firm but are not directly employed by the firm, such as customers or suppliers.

Focal organization

The organization from whose perspective a stakeholder analysis is conducted.

General systems theory

A theory that holds that all organisms are open to, and interact with, their external environments.

Interactive social system

A theory that holds that all organisms are open to, and interact with, their external environments.

Internal stakeholder

Individuals who are employed by the firm, such as employees and managers.

Market stakeholder

A stakeholder that engages in economic transactions with a company.

Nonmarket stakeholder

A stakeholder that does not engage in direct economic exchange with a company, but is affected by or can affect its actions.

Shareholder theory of the firm

A theory that holds that the purpose of the firm is to maximize its long-term market value. (Also known as ownership theory of the firm.)

Society

Refers to human beings and to the social structures they collectively create; specifically refers to segments of humankind, such as members of a particular community, nation, or interest group.

Stakeholder

A person or group that affects, or is affected by, a corporation’s decisions, policies, and operations. (See also market stakeholder and nonmarket stakeholder.)

Stakeholder analysis

An analytic process used by managers that identifies the relevant stakeholders in a particular situation and seeks to understand their interests, power, and likely coalitions.

Stakeholder coalitions

Alliances among company’s stakeholders to pursue a common interest; generally are not static relationships.

Stakeholder interests

The nature of each stakeholder group, its concerns, and what it wants from its relationship with the firm.

Stakeholder map

A visual representation of the relationships among stakeholder interests, power, and coalitions with respect to a particular issue.

Stakeholder power

The ability of one or more stakeholders to make an event happen or to secure a desired outcome in their interactions with a company. The five types are voting power, economic power, political power, legal power, and informational power.

Stakeholder salience

A stakeholder’s ability to stand out from the background, to be seen as important, or to draw attention to itself or its issue. Stakeholders are more salient when they possess power, legitimacy, and urgency. (See also salience.)

Stakeholder theory of the firm

A theory that holds that the purpose of the firm is to create value for society.

Anglosphere

Businesses and corporations that speak English and are all connected financially by two major cities; London and New York (London is most powerful)

Spanosphere

Businesses and corporations that speak Spanish and are all connected by Brazil and Argentina

Francosphere

Businesses and corporations that speak French

Sinosphere

Also known as the Asiansphere, businesses and corporations that are Asian, China is first, followed by Japan

Ethics

What is right and what is wrong

Sovereignty

Money belongs to the consumer and it’s their choice on what and how they choose to use it