| Course | BUS 560 Business Ethics |
|---|---|
| Module | Module 4 |
| Paper type | Stakeholder value analysis |
| Length | About 1,011 words, 6 pages |
| Format | APA 7 student paper |
| School | Aspen University |
| Program | MBA |
| Updated | October 2026 |
Free sample paper for BUS 560 Module 4
Paying More to Earn More: Stakeholders, Shared Value and a Frozen Food Maker's Decision on Wages and Family Leave
Student Name
MBA Program, Aspen University
BUS 560: Business Ethics
Instructor Name
Month Day, Year
Paying More to Earn More: Stakeholders, Shared Value and a Frozen Food Maker's Decision on Wages and Family Leave
Keystone Kitchen Foods, a composite family-owned company in Scranton, Pennsylvania, makes frozen pierogi, soups and other prepared foods sold through grocery chains in the Northeast. Its 460 production workers run two shifts. Starting pay is $16 an hour, and the company offers no paid family leave beyond what state law requires. Annual turnover among production workers is 58%, and the plant regularly relies on overtime to fill gaps. The human resources director has proposed raising starting wages to $19 an hour and adding six weeks of paid family leave, at a cost of about $3.1 million a year. The owning family has asked whether this is the right decision for the business.
The Stakeholders
| Stakeholder | Main interests | How the proposal affects them |
|---|---|---|
| Production workers | Pay, schedules, time for family, safety | Higher pay and leave; more stable crews |
| Owning family | Long-term value, reputation, the company's legacy in Scranton | Higher costs now; possible gains in productivity and stability |
| Grocery chain customers | On-time delivery, quality, price | Fewer late orders if staffing stabilizes |
| Local community | Good jobs, stable families | Better wages for many local households |
| Suppliers | Reliable orders and payment | Little direct effect |
Stakeholders and Shareholder Value
Freeman et al. (2010) argued that the old debate between serving shareholders and serving stakeholders presents a false choice. Firms create value through relationships with employees, customers, suppliers and communities, and managing those relationships well usually serves shareholders over time. Neglecting a stakeholder group, such as workers, eventually costs the business through lower productivity, quality problems or damaged reputation.
Porter and Kramer (2011) made a related argument, which they called shared value: companies can create economic value by addressing social needs that affect their business. Low wages, high turnover and stress on workers' families are social problems, but they also impose costs on a factory through lost training, errors and absences. Addressing them can improve the company's own performance.
Evidence From the Market
Edmans (2011) studied companies on a list of the best places to work in America from 1984 to 2009 and found that they earned stock returns above benchmarks, about 3.5% a year after adjusting for risk, and outperformed in earnings relative to analysts' forecasts. He concluded that the market did not fully value the benefits of employee satisfaction, which appeared only gradually in results. For a private company like Keystone, the finding suggests that investments in employees can produce real but delayed returns.
Costs and Benefits
The program would cost about $3.1 million a year: $2.7 million for higher wages, including related payroll costs, and about $400,000 for paid leave, based on expected use.
The company's records suggest substantial offsetting savings. Each departing production worker costs about $6,500 in recruiting, training and lost productivity during the first months. Comparable employers in the region that raised wages saw turnover fall to about 35%. A drop from 58% to 35% would mean about 105 fewer departures a year, saving roughly $680,000. Overtime used to cover vacancies costs about $1.4 million a year; stable staffing could cut it by half, saving $700,000. Late deliveries caused by short-staffed shifts led to penalties and lost promotions with grocery chains worth about $1.2 million last year, of which perhaps $1 million is attributable to staffing. Product loss from errors by new workers adds another $200,000 in potential savings. Together, these come to about $2.6 million.
The Family's Concerns
The owning family raised three concerns, each fair. First, a raise cannot easily be reversed if business turns down. Second, grocery chains may not accept higher prices, so the company must absorb the cost. Third, competitors may not follow, leaving Keystone at a cost disadvantage. The analysis answers the first two with the savings estimates, which do not depend on price increases. The third is real: a competitor paying less could undercut Keystone on price. But the same competitors face the same turnover and overtime costs, and several regional food manufacturers have already raised starting pay to attract workers.
How Workers Were Consulted
The proposal grew from a survey of production workers in which pay and the lack of family leave were the two most frequent reasons given for considering leaving. Exit interviews told the same story: workers left for warehouse jobs paying $1 to $3 more an hour, and several new parents left because they could not afford unpaid time off. The design of the program, a wage increase plus leave, responds directly to what workers said.
What the Numbers Do Not Settle
The expected savings cover most but not all of the program's cost; about $500,000 a year remains unrecovered on these estimates. Some benefits, such as better quality, the company's reputation as an employer in Scranton and workers' ability to care for newborns or sick parents, are real but hard to price. At this point, the decision rests partly on ethical grounds: whether the family believes its workers should be able to support their families and take time for them without losing income.
Measuring the Results
The family should expect results to appear over months, not weeks. Turnover will fall only as new hires stay past their first year, and grocery chains will notice reliability only after several quarters of on-time deliveries.
Recommendation
Keystone should adopt the program. The business case covers most of its cost, research suggests the remaining benefits may appear over time, and the program reflects the company's stated commitment to its community. It should introduce the wage increase now and phase in family leave when the next budget year opens, track turnover, overtime, on-time delivery and product loss monthly, and report the results to the family after one year.
Conclusion
Treating workers better is not charity for Keystone; most of its cost is recovered through lower turnover, less overtime and fewer late deliveries. Stakeholder theory, shared value and market evidence explain why. The gap that remains is where ethics, not arithmetic, guides the decision, and the family can close it knowing it has measured what it can.
References
Edmans, A. (2011). Does the stock market fully value intangibles? Employee satisfaction and equity prices. Journal of Financial Economics, 101(3), 621-640. https://doi.org/10.1016/j.jfineco.2011.03.021
Freeman, R. E., Harrison, J. S., Wicks, A. C., Parmar, B. L., & de Colle, S. (2010). Stakeholder theory: The state of the art. Cambridge University Press.
Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1/2), 62-77.
What the BUS 560 Module 4 instructions ask for
Aspen's catalog for BUS 560 describes ethics as integral to an organization's value-creation activities, and the fourth module commonly asks students to analyze a decision through its effects on stakeholders and on long-term value. A single decision about a plant's workforce is examined here. Identify the stakeholders affected and what each cares about. Explain theories that connect stakeholder treatment to firm value, with evidence. Estimate costs and benefits with numbers, including effects that are often missed, such as turnover and quality. Address the shareholder perspective directly rather than assuming it is opposed. Recommend a decision and explain where the business case ends and ethical reasons must carry the argument.
How the BUS 560 Module 4 example is put together
The paper opens with Keystone Kitchen Foods, its two shifts and its annual worker turnover of 58%. A stakeholder table lists workers, the owning family, customers such as grocery chains, the local community and suppliers, with each group's interests. Freeman and colleagues' Stakeholder Theory: The State of the Art argues that managing for stakeholders aligns with long-run value. The shared value argument of Porter and Kramer explains how meeting workers' needs can lift productivity. Edmans's Journal of Financial Economics study found that companies on a best-places-to-work list earned annual stock returns several points above benchmarks over 25 years. A cost comparison sets the $3.1 million program against about $2.6 million in turnover, overtime and late-delivery penalties it is expected to reduce. A recommendation and an honest account of the remaining $500,000 close the paper.
Where the marks sit in the BUS 560 Module 4 rubric
Stakeholder papers in an MBA ethics course are graded on accurate identification of stakeholders and interests, sound use of theory and evidence, a credible cost and benefit analysis and an honest treatment of where interests conflict. This example maps stakeholders in a table and connects their interests to measurable outcomes. The stakeholder theory of Freeman's team and the shared value case made by Porter and Kramer supply the theory, and Edmans's Journal of Financial Economics study supplies market evidence, each cited where it supports a specific claim. The cost comparison uses the company's turnover and overtime figures, so the business case can be checked. Acknowledging that the program does not fully pay for itself, and explaining why it is still justified, shows integrity in the analysis.
BUS 560 Module 4 help: mistakes that cost marks
Weak stakeholder analyses list groups and say every group matters equally. Identify each group's specific interests and how the decision affects them. Another error is presenting a business case so optimistic that ethics becomes unnecessary; be honest about costs that are not recovered. Use evidence, not slogans, for claims that treating employees well raises value. Quantify turnover, training and quality costs, which are often larger than managers assume. Address shareholders' interests directly; they are stakeholders too. Avoid treating the decision as charity, since the course frames ethics as part of value creation. Finally, recommend how to measure whether the expected benefits appear, so the decision can be reviewed with evidence.
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BUS 560 Module 4 questions, answered
What does BUS 560 Module 4 usually ask for?
Aspen's BUS 560 covers stakeholders and value creation in this module, so analyzing a decision's effects on stakeholders and on long-term value is typical. Follow your classroom prompt.
What is stakeholder theory?
The view, developed by Freeman and others, that firms create value by managing relationships with all groups that affect or are affected by them, not only shareholders.
What is shared value?
Porter and Kramer's idea that companies can create economic value by addressing social needs connected to their business, such as worker health or skills.
Where can I find a free BUS 560 Module 4 sample paper?
The complete analysis is shown above: a frozen food maker weighing higher wages and family leave, with a stakeholder table, theory, evidence on employee satisfaction and returns, and a cost comparison.
Does treating employees well raise company value?
Edmans found that firms named among the best places to work earned higher stock returns than benchmarks, suggesting markets undervalued employee satisfaction.