The role business plays in society is to create wealth for shareholders, employees, and customers, as well as the society around them. Businesses have the responsibility to provide jobs, which allows employees the monetary freedom to purchase goods, thus stimulating the economy. Further, it is the responsibility of businesses to provide goods and services to customers in exchange for compensation. When the company is compensated, they are able to provide more jobs, as well as an enhanced version of the goods they are marketing. Finally, the role business plays in society is to provide profit to the owners. This, again, stimulates the economy and allows the company to either expand on current ideas or pursue additional avenues.
Businesses also possess a responsibility to their stakeholders. Stakeholders are the people or groups of people that have an interest in the company or are affected by how or what a company produces (“Working for sustainable.”). They can be anyone from banks, customers, the community, government leaders, and the media to suppliers, dealers, and employees (Nickels, McHugh, & McHugh, 2013). Each stakeholder has a separate interest in the company and desires to see their priorities met by the company. For example, if a company were to pursue expanding their building, which lead to the demolition of a historic park in a town, one of their stakeholders, the surrounding community, would certainly be distressed. It is also important for the business to address the stakeholders’ needs because they are in need of their support to meet objectives. In the example provided, the company would not wish to cause a disturbance with their relationship, so they may decide to pursue expansion on a different plot of land.
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...the economy, and can even benefit local communities by establishing charities and hosting neighborhood cleanups. They are paid for the services they provide, not always monetarily, but sometimes with customer loyalty. Customer’s loyalty to a brand due to their investment in their stakeholders or involvement in the community can be a significant benefit to a company who is looking to expand.
Works Cited
How Many Stakeholders Does Your Site Have?. (n.d.). Retrieved from http://www.seobook.com/archives/001984.shtml
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Working for sustainable development in primary industry. (n.d.) Retrieved from http://businesscasestudies.co.uk/anglo-american/working-for-sustainable-development- in-primary-industry/responsibility-to-stakeholders.html#axzz31Ml6pEw1
Ebert Ronald J and Griffin Ricky W. (2011).Business Management.(8th edition). Business essentials, (pp.94-97), Boston [Mass]; London: Pearson.
Burrow, J. L., & Kleindl, B. (2008). Business management. (13th ed., p. 562). Mason, Ohio: South-Western.
A stakeholder is a person or organisation that has an interest or a concern with in a business. Stakeholders can both influence and be influenced by the actions of the business, its objectives and policies. Examples of both internal and external stakeholders are shown below.
Another benefit of buying services from local providers is that the monies go back into the community. Unlike world-wide providers whose sales go into large corporations that have no connection to a distinct area. Along with profiting big corporations, these monies are used to pay for overinflated executive salaries. With local service providers, we see this money in return through sponsorship of local events and the contributions made by local businesses.
To well define what a stakeholder is becomes a difficult subject mainly because there many controversial and confusing factors to first address (Friedman & Miles, 2006). First, in a typical organization or if you need, a company, there emerge various types of stakeholders who occur in different levels and playing quite distinct roles (Savage et al, 1991). Secondly, the meaning of the term stakeholder when it comes to a particular point of view is bleached such that it considers only the major parties. A good example is the most governments’ view of the companies that thrive under their respective roofs where only the shareholders or well put, the owners, are considered as stakeholders regardless of whether or not there are other key participants in the overall management of these companies. Here, a stakeholder is considered as a person who has invested in the company or the (Friedman &Miles, 2006) organization in question by either contributing monetary support or as a co-founder of the organization. Such a person is involved in the making of major decisions for the organization. However, it is important to note that there are other role players of importance. Such include those people who are indirectly affected by the presence of an organization, for example, the end users or the receivers of the impacts of any decisions made.
lies at the heart of business in the modern world and plays an integral part
A Stakeholder is anybody, be it an individual, group or business, with a vested interest in an organisation. On organisation can determine its stakeholders by considering who and what is affected by any of their business activity. Understanding who you work with and for helps to build strong relationships and ultimately, will help in achieving organisational objectives. Reputation is very important and can be very hard to achieve, but easily lost; people are more willing to listen to organisations with a strong reputation where trust and communication is effective. It’s important for organisations to understand who their stakeholders are and what their needs are as they are one of the main factors that will determine and effect whether the
Robbins, S., Decenzo, D., & Coulter, M. (2013). Fundamentals of management. Upper Saddle River, NJ: Pearson Education, Inc.
In the first major paper on stakeholder theory, Edward Freeman and David Reed state that a stakeholder is "Any identifiable group or individual on which the organization is dependent for its continued survival." (Freeman and Reed 89) Given that these groups' input are all vital part of an organization's success, creating solutions that benefit all stakeholders is important for long term success. Solutions that conflict with the interest of one of the stakeholders, could result in that stakeholder withdrawing the support that the organization needs to survive. When leaders of an organizations are servants first, when they "make sure that other people’s highest priority needs are being served" (Greenleaf , “The Servant as leader” 3), then the organization's stakeholders will be invested in the organization's continued success and as a result will be more likely to lend it their support.
Have you ever heard about sociology? What is it? How can sociology affects business? Whether people do business well without sociology? Some articles show that everything takes place in a sociological context, including business. When people manage a company, they manage people including employees and customers and try to meet their needs and wants. It is important for them to know about the groups they are dealing with and how they interact because this helps them manage more effectively.
Stakeholders are those groups or individual in society that have a direct interest in the performance and activities of business. The main stakeholders are employees, shareholders, customers, suppliers, financiers and the local community. Stakeholders may not hold any formal authority over the organization, but theorists such as Professor Charles Handy believe that a firm’s best long-term interests are served by paying close attention to the needs of each of these stakeholders. The modern view is that a firm has responsibilities to all its stakeholders i.e. everyone with a legitimate interest in the company. These include shareholders, competitors, government, employees, directors, distributors, customers, sub-contractors, pressure groups and local community. Although a company’s directors owes a legal duty to the shareholders, they also have moral responsibilities to other stakeholder group’s objectives in their entirely. As a firm can’t meet all stakeholders’ objectives in their entirety, they have to compromise. A company should try to serve the needs of these groups or individuals, but whilst some needs are common, other needs conflict. By the development of this second runway, the public and stakeholders are affected in one or other way and it can be positive and negative.
Robbins, S. P., & Coulter. M. (2014). Management (12th ed.). Retrieved from: Colorado Technical University eBook Collection database.
Boone, L. E., & Kurtz, D. L. (2009). Contemporary Business (13 ed.). New York, NY: Wiley.
Stakeholders are interest of an individual or groups that directly or indirectly affected by the organisation’s activities, policies and objectives (Henry Frechette, 2010). Stakeholders can be divided as internal (managers and employees) and external (shareholders, customers, and suppliers) (BPP F9). Different stakeholders may have common interests or conflict interests with company. Company board members or management must take care about stakeholders’ interest. They can’t make the decision based on their own interest or their relation with others organisation. Conflict of interest will arise when interests of organisation act in concert with managers’ personal interests or interests of another person or organisations, (Anon, no date).
Stakeholders refer to individuals or groups of people that have an interest in a business. Management argues that as long as there is wealth for shareholders, then anything is done in a responsible manner and things should be done to promote the interest of other stakeholders.