Stakeholder management is a concept applied to many types of organizations, where strategic decision-making takes into account the interests of multiple different stakeholders (Thompson, 2016). Advocates of the stakeholder perspective have argued that the stakeholder approach is a better way to evaluate a business' success, as opposed to strictly considering financial results (Perrini & Tencati, 2006). The concept of the balanced scorecard hypothesizes that businesses that look after the interests of all stakeholders will perform well on measures affecting all, including the financial measures. There are differing opinions on this, however. The stakeholder approach advocates for multiple different measures for business, and this is diametrically opposed to the normal means of evaluation, which are strictly financial in nature. It is not actually possible to reconcile these, but both contain financial measures. Many companies seek to portray themselves as giving due attention to non-financial interests, but this is not always the case. Sometimes they mostly pay lip service, and are still focused primarily on the interests of the shareholders. The classic argument for doing this is that the shareholders have put up their capital for the business' benefit, and therefore are entitled to earn a return on that...
This view is at odds with the stakeholder approach, which appreciates the role that employees play, but also the environment and customers, and governments that rely on business for a tax base and to create jobs. The evidence is thus unclear as to which approach is better, but many instances where business seek to maximize profit are clearly instances where other stakeholders are rejected -- offshoring, outsourcing, polluting and tax dodging all among the common activities that do not fit with the stakeholder model.
If the enhanced stakeholder perspective is truly the best for corporate social responsibility, this has significant implications not only for management but also for corporate governance. While Nohria (no date) argues that corporate governance is a hygiene factor in that its absence is a problem for companies but its presence did not correlate with improved performance, this is only for basic levels of governance. For a board to truly adopt
Stakeholder Approach to Corporate Responsibility This essay examines the question of whether adopting a stakeholder approach is a sufficient means of assuring that corporations meet their moral responsibilities due society. The essay includes a survey of the literature on the subject. Any discussion of the effectiveness of stakeholder theory must address who and what are considered stakeholders. R. Edward Freeman (1984) defines stakeholders as "any group or individual who can affect or
Stakeholder Analysis Ford Motor Company Key Stakeholders Ranked by Level of importance Internal Stakeholders External Stakeholders Corporate officers -- Responsible for establishing the goals and mission of the company and ensuring that managers and employees at all levels are properly carrying out the strategy of the company. (Luca, 2007) Customers/Car owners -- customers make an investment when purchasing a vehicle and they expect the vehicle to be safe and reliable. Customers depend on their vehicles
Also, businesses should be open to the idea of changing the way these relationships are formed and maintained to make way for the changing business environment. "Changing the prevailing relationship a firm has with its stakeholders offers an opportunity for innovation and the economic rewards that accompany such innovation" (Harting, Harmeling & Venkataraman, 2006, p.44). Conclusion In short, different stakeholder groups have a big impact on the performance of a company. Their
As a consequence, investors may suffer. Importance of the Study It is necessary and pertinent to discuss the importance of any study, and this particular study is important to many people across many countries. Not only does it have importance for people who are trusting people with their pension and hedge funds in Germany, but it also has importance for people who are considering a career working with these funds and
Performance Management A comparison case studies practices organisations United Kingdom. You choose specifically focus performance management (PM) high performance working (HPW). Research choose organisations high performance work (HPW) practices. Performance management is a process-centric, holistic approach to company's decision making process that is intended to improve the company's capability and to manage its performance at all levels by combining stakeholders, customers, managers, and suppliers. Many companies rely on performance management to improve
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