chapter 1_the corporation & its stakeholders

8/10/2019 Chapter 1_The Corporation & Its Stakeholders

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The Corporation and

Its Stakeholders

Chapter

1


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Contents

In what ways are they part of an interactive system2

4

3

3

The relationship between business and society3

1

What is a stakeholders?

The purpose of the modern corporation


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Contents

6

What forces of change continually reshape the

business and society relationship?8

3

7

3

5

What is stakeholder anaylsis?

Who are a corporations market and non-market

stakeholders?

How can it be used to build collaborative

relationships?


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Business and Society

Business - dominant institutions in society

Refers to any organization that is engaged in making aproduct or providing a service for a profit.

Society

Refers to human beings and to the social structuresthey collectively create, or

Refers to segments of humankind, such as members of

a particular community, nation, or interest group


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A Systems Perspective

All living organisms (systems) interact

with, and are affected by, other forces in

their host environment.

Interactive social system


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The Stakeholder Theory

Ownership theory of the firm

The firm is seen as the property of itsowner

Stakeholder theory of the firm

corporations serve a broader publicpurpose; to create value for society


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The Stakeholder Theory

Descriptive arguments

The stakeholder view is simply a more

realistic description of how companies

really work I nstrumental arguments

Stakeholder management is more

effective as a corporate strategy

Normative arguments

Stakeholder management is simply the

right thing to do


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The Stakeholder Concept

Stakeholders are those people and

groups that affect, or can be affected

by, an organizations decisions, policies

and operations.

Market stakeholders (Fig. 1-2)

Non-market stakeholders (Fig. 1-3)


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Relations between a business firm and its market

stakeholders (Figure 1-2)

Business

firm

(Managers)

Wholesalers

(Retailers)

Creditors

Suppliers

Customers

Stockholders

Employees

(Unions)

Invest

capital

Lend

money

Sell

materials

Buy

products

Distribute

products

Sell

labor


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Relations between a business firm and some of its other

(secondary) stakeholders (Figure 1-3)

Business

Firm

(Managers)

The

General

Public

Business

Support

Groups

Social

Activist

GroupsMedia

Governments

Communities

Regulation,

taxes

Friendly,

hostile

Social

demands

Image,

publicity

Advice,

research

Positive,

negative

opinion

Jobs,

environment


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Stakeholder Interests and Power

Stakeholder interests:Different stakeholder has different interest

Stakeholder power: the ability to use resources to make an

event happen or to secure a desired outcome

Voting powerEconomic power

Political power

Legal power

Stakeholder coalitions:

The temporary unions of stakeholder groups that come

together and share a common point of view on a

particular issue or problem


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Stakeholder Engagement

Inactive

Reactive

Proactive

Interactive


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Forces that shape the business and

society relationship (Figure 1-4)

Globalization

Growing emphasis on ethical

values

Evolving government regulation

of business

Explosion of new technology

Business andits

Stakeholders Dynamic of natural environment

Changing of societal

expectations


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Forces that Shape the Business and Society

Relationship (Figure 1.5)

Business &

its stakeholders

Envolving Government

Regulation of Business

Growing Emphasis on

Ethical Values

Globalization

Explosion of New Technology

Changing Societal

Expectations

Dynamic Natural Environment


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Global Internet usage, 2000-2005 (Exhibit 1-A)

Top Nations in Internet Use at Year-end, 2000Users (millions) Percentage of total1. United States 135.7 36.20%2. Japan 26.9 7.803. Germany 19.1 5.104. UK 17.9 4.77

5. China 15.8 4.206. Canada 15.2 4.057. South Korea 14.8 3.958. Italy 11.6 3.089. Brazil 10.6 2.84

10. France 9.0 2.39

11. Australia 8.1 2.1612. Russia 6.6 1.7713. Taiwan 6.5 1.7314. Netherlands 5.4 1.4515. Spain 5.2 1.39


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Global Internet usage, 2000-2005 ~ Continued

374.9 million worldwide Internet users per year.

Top 15 countries accounted for 80% of users.

The United States leads with over 35% of users.

By 2005, 600 million Internet users are expected.


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