...your textbook (Stakeholder Typology: One, Two, or Three Attributes Present) discuss the ‘Ethics in Practice case’ on page 46 (Are Plants and Flowers Stakeholders? Do they have rights?) Freeman (1984, P. 46) popularized the definition of a stakeholder as ‘. . . ANY group or individual who can affect or is affected by the achievement of the organization’s objectives’. This is a very broad definition meaning that in today’s global business environment any individuals and groups may be business’s stakeholders (Davey, 2015). This sparks the debate about whether or not the natural environment can be identifiable as a stakeholder. In the ethics in practice case ‘Are Plants and Flowers Stakeholders? Do they have rights?’ this topic is highlighted. The following discussion will review the idea of the environment as a primary stakeholder taking into account the stakeholder identification framework of Mitchell et al. (1997), suggesting that stakeholders have a mixture of legitimacy, power and urgency(Davey, 2015). In keeping up with the growing concern for sustainability many argue that the natural environment should be considered among important stakeholders (Davey, 2015). Historically the natural environment has often been neglected because it has never had a spokesperson(Davey, 2015). However as a concern for the environment (particularly global warming) grows so does the number of environmental groups. Groups such as Greenpeace are regarded as indirect stakeholders and as a result...
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...MANAGING FOR STAKEHOLDERS: TRADE-OFFS OR VALUE CREATION1 One of the central uses of stakeholder theory, in its original form, was as a counterpoint to the idea that corporations should be managed in the interests of shareholders. As the theory developed the debate was often framed in terms of “shareholders vs. stakeholders.” While developing “theories of the firm” is an interesting and useful project, focusing solely on “theory of the firm” obscures a more important contribution of stakeholder theory. The purpose of this brief essay is to set forth what I consider to be the central insight of stakeholder theory: the jointness of stakeholder interests. The Basic Idea The basic idea of “managing for stakeholders,” as I now see it, is quite simple, and I believe it is closer to the origins of the idea from Eric Rhenman and the Tavistock thinkers. In fact, Juha Nasi was correct in his assessment of the Scandinavian origins of the stakeholder idea that focus on what holds stakeholder interests together. Nasi originally suggested that we focus on “intressent” in Swedish. “In Finnish this term was modified as “intressentti” or “sidosryhma” which could be translated as an “interest group” or even as a “linkage” or “bonding” or “binding” group.” (Nasi, 1995 at 98) It is this bonding or binding idea that is most interesting to explore. Managing for stakeholders asks us to see stakeholders as “bound together by the jointness of their interests.” So, the basic idea goes like this. Business...
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...BUSINESS, CULTURE AND SOCIETY Shareholder v/s. Stakeholder Theory Under the guidance of Dr. Kuriakose Mamkoottam Professor & Director School of Business, Public Policy & Social Entrepreneurship (SBPPSE) Ambedkar University Delhi (AUD) Submitted by: Amrita Arora S143F0005 Shareholder v/s. Stakeholder Theory The term business refers to any organization that is engaged in making a product or providing a service for a profit. And society, in its broadest sense, refers to human beings and to the social structures they collectively create. Both, business and society, taken together, form an interactive social system. Each needs the other, and each influences the other. The most central and debatable topic on the relation between business and society today is about the fundamental purpose of the business. This question has been answered with the help of two different theories – Shareholder Theory and Stakeholder Theory. Each of them is explained below. The Shareholder Theory (Ownership Theory of the Firm) sees the firm as the property of its owners. The purpose of the firm is to maximize the returns to its shareholders, which is also depicted in its single objective of Value Maximization. Here, managers and boards of directors are agents of shareholders and have no obligations to others, other than those directly specified by law. Many companies, like Apple, have performed exceptionally well while following the shareholder theory because they are of the view that social welfare...
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...Larry Chapman Business Ethics Exam Two The Stakeholder theory of a firm is made up into equal percentages on a pie chart, which is made up of Financials, Suppliers, Employees, Customers and Communities. The Stockholder theory of a firm is made up by a pyramid structure consisting of Labor, Management, CEO, Board and Stockholders. I believe the Stakeholder theory is less ethical than the stockholder theory in terms of Libertarianism and Egoism. Libertarianism view points are that there is no direct harm, not infringing on rights, not breaking the laws, government protection only, free market and charity. The Egoism viewpoint is to maximize long-term self-interest. The Stakeholder Theory is less ethical from the Libertarianism viewpoint, because there are some major concerns that don’t agree with their principles. The first principle it breaches is no-direct harm, because it does cause direct harm. The theory causes direct harm by having everybody set as equal to the firm, but in reality the creditors and shareholders are above everybody. I believe this causes harm in that you have to pay back your creditors and shareholders back first, because without them there would not be a company and if you don’t pay them their higher percentage they will not re-invest inside the company, which will cause the direct harm to the pie by causing the equal pie pieces to be broken up and forcing the company to shutdown due to default. This theory also infringes on the rights of the Financials...
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...The basic tenet of this theory is that the firms’ success is dependent upon the successful management of all its stakeholders and not only the shareholders. According to Freeman (1984) stakeholders comprise any group or individual who can affect or be affected by the achievement of the organisation’s objectives. Some scholars have agreed with his position on the responsibility of the firm to a broader set of stakeholders other than shareholders while Friedman (2002); Brenner and Cochran (1992) have opposed the idea. Stakeholder theory tries to articulate a fundamental question in a systematic way: which groups are stakeholders deserving or requiring management attention and which group are not (Mitchel et al 2001). Stakeholder’s analysis enables identification of those societal interest groups to whom an adequate account of activities would be deemed necessary. According to Trotman (1999), this theory proposed an increased level of environmental awareness which creates the need for companies to extend corporate planning to include the non traditional stakeholders like the regulatory adversarial groups in order to adapt to changing social...
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...crisis: 4 Stakeholders and Typology theories: 4 Definition of Stakeholders: 4 A typology theories of stakeholder: 4 Types of stakeholders: 5 Ethical Framework: 5 Applying stakeholder theories to this Bulgaria case: 5 Refugees: 5 Bulgarians: 6 European Union: 7 IS-terrorist attacks: 8 Apply the ethical approach into the view of the Bulgaria’s government: 8 Conclusion 10 REFERENCE: 10 Introduction: As we can see that ethics is perceived in different angles and aspects but it is, undeniably, an important role of ethics in our life. According to Noel Preston (2001, p.18) ethics indicates the general views of what is right, fair or good. It is also the core values, rules which we use to make our choices and actions. Similarly, (Boardman, 2005) said that ethics is applied naturally for many areas such as our own lives, business and an organisation. In our daily lives, making decisions and actions seem to be driven or motivated from/ by the certain standards or values. Furthermore, ethics target on evaluating the right or wrong behaviours of both individuals and the good or bad performance of an organisation. This report will evaluate the ethical approach which Bulgaria government uses to make the fence-line decision. This paper will be divided into four parts. The first part is going to summary the Bulgaria cases. The next part will come up with all stakeholders and typology theories. Then the third part, this report will apply these stakeholder and typology...
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...STRENGTHENING STAKEHOLDER-COMPANY RELATIONSHIPS THROUGH MUTUALLY BENEFICIAL CORPORATE SOCIAL RESPONSIBILITY INITIATIVES C.B. Bhattacharya Daniel Korschun Sankar Sen Forthcoming: Journal of Business Ethics Abstract Corporate social responsibility (CSR) continues to gain attention atop the corporate agenda and is by now an important component of the dialogue between companies and their stakeholders. Nevertheless, there is still little guidance as to how companies can implement CSR activity in order to maximize returns to CSR investment. Theorists have identified many company favoring outcomes of CSR, yet there is a dearth of research on the psychological mechanisms that drive stakeholder responses to CSR activity. Borrowing from the literatures on means-end chains and relationship marketing, we propose a conceptual model that explains how CSR provides individual stakeholders with numerous benefits (functional, psychosocial, and values) and how the type and extent to which a stakeholder derives these benefits from CSR initiatives influences the quality of the relationship between the stakeholder and the company. The paper discusses the implications of these insights and highlights a number of areas for future research. 1 STRENGTHENING STAKEHOLDER-COMPANY RELATIONSHIPS THROUGH MUTUALLY BENEFICIAL CORPORATE SOCIAL RESPONSIBILITY INITIATIVES Corporate social responsibility (CSR), or “a commitment to improve community wellbeing through discretionary business practices...
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...Hasnae Benyaich The Social Responsibility of a Business is to Increase Profit by Milton Friedman in the light of The Stakeholder Theory by Edward Freeman In light of Friedman's understanding, we can without much of a stretch withhold his fundamental contentions in respect of corporate social responsibility. Friedman contends that the main obligation of a business is to make utilization of its potential asset for the sole purpose of expanding benefit. For him, staying aware of the capitalist principles of the business is an ethical need since it depends on free and fair competition. In addition, stakeholders are forcing corporate officials to provide an optimal financial situation of the company, regardless of social responsibility. Friedman contends that social obligation is not appropriated to companies but rather to people and in this manner a corporate official has a commitment toward partners, workers and clients; or else he will lose the power given to him. In particular, he trusts that each business ought to be viewed as an individual property and the flexibility to have a business is a social obligation in itself, in condition that it remains within the principles of the capitalist system. Friedman takes a gander at different examples where he considers social obligation an out of line task to a corporate official since it would be considered as another sort of tax collection. Regardless of the fact that the corporate official concedes to using such a methodology, the...
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...1. Profile the U.S. Market in terms of “Consumer Trends” and the effects of “Competitive Rivalry in the retail sectors”. Identify the specific and general driving forces behind these trends. Due to the credit-crunch many commentators point out that the global consumer mindset is tuned to recession-spending.The main point is that US consumers who used to be very materialistic,now tend to spend less money on their purchases.And there are some consumer trends that support this issue. “The Lipstick Effect” is the phenomenon of the rise of small self-treating on make-up and gadgets when people forego extravagant purchases such as cars and holidays in times of recession. This tendency is all about consumers' sustained need to enjoy consumption and express their identity despite their pressured lives. Overall, consumers may scale down on purchases and live with delayed gratification by saving and investing more in retraining and putting more energy into getting better value. But the definition of value will be different for different products. For instance, consumers will seek the lowest price for products that serve basic needs such as food, whereas in self-treating and small luxuries, the value of feeling indulged is given precedence. The Lipstick Effect endures. Consumers still appear willing to splurge on prestige items. This has led to a huge wave of websites on how to be frugal but also keep up appearances. . Commentators, journalists and bloggers are certainly signalling...
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...world"(Goldstein, 1999, p.27). Young people between 18 and 30 were chosen as a target group due to the fact that they were trendsetters and interested in sports activities. Furthermore, they are fashion conscious and they have knowledge of how using the internet (Okonkwo, 2007). The company is a fashion retailer, selling quality products of branded and niche suppliers, with a promise of a free delivery within five days. They listed brands such as Tommy Hilfiger, Fila, Lacoste and Adidas (Malmsten, Portanger and Drazin, 2001). But obviously something went wrong, because nowadays Boo.com is well-known as the largest European dot.com failure. Hence, this assignment will analyze the rise and fall of boo.com in detail, with regard to stakeholder identification and an environmental scanning (internal and external) as well as a recommendation or strategic implementation how their strategy would have been...
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...Small business social responsibility: Expanding core CSR theory Laura J. Spence Abstract This paper seeks to expand business and society research in a number of ways. Its primary purpose is to redraw two core CSR theories (stakeholder theory and Carroll’s CSR pyramid), enhancing their relevance for small business. This is done by the application of the ethic of care, informed by the value of feminist perspectives and the extant empirical research on small business social responsibility. It is proposed that the expanded versions of core theory have wider relevance, value and implications beyond the small firm context. The theorization of small business social responsibility enables engagement with the mainstream of CSR research as well as making a contribution to small business studies in scholarly, policy and practice terms. Key words: corporate social responsibility, ethic of care, feminist ethics, small and medium sized enterprises (SMEs), small business, Carroll’s pyramid, stakeholder theory. Correspondence: Laura J. Spence, PhD. Professor of Business Ethics. Director, Centre for Research into Sustainability, School of Management, Royal Holloway, University of London, Egham, Surrey, TW20 0EX, UK. Laura.Spence@rhul.ac.uk Acknowledgements: With sincere thanks to the special issue editors and reviewers, Kate Grosser and Dirk Matten for their insightful comments in the development of this paper. Introduction Small business social responsibility - whether it be a software...
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...Corporate Social Responsibility (CSR) is an area which has gained much attention the last 10-15 years. To satisfy various stakeholders, corporate social responsibility has increased its importance and often constitutes a substantial part of the firms´ financial reports, in spite of the fact that there are no legal requirements. However, to perform strategic CSR-reporting has become more or less compulsory for firms. The research question is: What research has been performed in the area of corporate social responsibility and accounting? Aim: The aim is to provide a structured overview of the literature in the area of corporate social responsibility and accounting regarding the years 2002-2012. The overview will provide a basis for future research and constitute a framework for focused research question. Delimitation: The focus of this study is on research published in scientific journals from 2002 until 2012. Method: A literature review was performed including peer-reviewed papers published in scientific journals. Database search were performed in Business Source Premier (BSP) with the keywords “Corporate social responsibility” and “accounting”, and the time limit was set to 2002-2012. Results and conclusions: The main result is shown in Table A1, which presents the structured overview and the categorization. All papers treated stakeholder theory showing that...
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...OF SOCIAL SCIENCES, NORWEGIAN SCHOOL OF HOTEL MANAGEMENT MASTER’S THESIS STUDY PROGRAM: THESIS IS WRITTEN IN THE FOLLOWING SPECIALIZATION/SUBJECT: Festival and Event Management IS THE ASSIGNMENT CONFIDENTIAL? MSc in International Hotel and Tourism Leadership No TITLE: Benefits of multi-stakeholder groups for participating in Gladmat festival AUTHOR ADVISOR: Prof. Reidar Johan Mykletun Student number: 215519 ………………… 214504 ………………… Name: Ambassador Rezene Meretse ……………………………………. Muhammad Yahya ……………………………………. ACKNOWLEDGE RECEIPT OF 2 BOUND COPIES OF THESIS Stavanger, ……/…… 2013 Signature administration:…………………………… 2 Abstract This paper investigates the benefits of multi-stakeholders from participating in the Gladmat festival in Stavanger. The findings of this study can help festival and event managers to understand which major factors can attract group of stakeholders to the festival. It could help them to formulate policies, to offer suitable segment focusing on the marketing field. Stakeholder theory, the benefit segmentation theory, push and pull motivation theory, and Maslow’s hierarchy theory were applied to find the benefits of stakeholders for participating in the festival. Mixed method research have been used to collect the data, three qualitative studies and one quantitative study is carried out to explore and describe the benefits from the festival. The outcome from the qualitative shows owners benefits by positioning and marketing...
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...renewed interest in stakeholderrelated concepts of management and receptivity to approaches which embed stakeholder engagement in the ‘business of business’. The stakeholder engagement function has moved from ‘nice to have’ to core business. This paper describes a fiveyear action research study to identify trends in corporate stakeholder engagement management and develop a stakeholder engagement management framework reflecting industry best practice. Keywords: Stakeholder, Corporate social performance, Stakeholder engagement, Ethical strategy, Systematic engagement INTRODUCTION Over the past decade and more, Australian organisations have increasingly sought to respond to global trends by incorporating social sustainability and social performance principals into organisational management - grappling with these concepts and their practical implementation in the business environment. Associated with this focus on social performance, has been a burgeoning interest in stakeholder-related concepts of management, together with a drive to enhance the strategic value of corporate communications functions such as stakeholder engagement, community consultation and social risk management - primarily to improve corporate responsiveness to the social environment. Emergence of stakeholder theories: According to Hitt, Freeman and Harrison (2001, p.190) the use of the term stakeholder emerged in the 1960s from pioneering work at Stanford Research Institute, which argued that managers...
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...Stakeholders, Shareholders and Wealth Maximization V. Sivarama Krishnan, University of Central Oklahoma ABSTRACT This paper attempts reconciliation between the two somewhat extreme views espoused by the shareholder wealth maximization paradigm and the stakeholder theory. The stakeholder theory challenges the basic premise built into corporate finance theory, teaching and practice. Corporate finance theory, teaching and the typically recommended practice are all built on the premise that the primary goal of a corporation should be shareholder wealth value maximization. Extant theoretical and empirical research in financial economics also generally accept shareholder wealth maximization as the normative and ideal goal on which all business decisions should be based. This paradigm assumes that there are no externalities and all the participants engaged in transactions with the firm are voluntary players competing in free, fair and competitive markets. A very different view is offered by what is loosely called stakeholder theory. The stakeholder theory posits that the focus on shareholders and firm value is misplaced and managers should be concerned with all stakeholders of the firm. The paper attempts to address what is felt as a lack of dialogue between the two camps. INTRODUCTION Corporate finance theory, teaching and the typically recommended practice at least in the US are all built on the premise that the primary goal of a corporation should be the maximization...
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