Chapitre 3: Stakeholder Analysis And Social Responsability Flashcards
What is the stakeholders definition
Stakeholders are individuals, groups, and organizations that can affect the firm’s vision and mission, are affected by the strategic outcomes achieved, and have enforceable claims on the firm’s performance
Stakeholders possess different degrees of ability to influence an organization
Greater dependence gives the stakeholder more potential influence over a firm’s commitments, decisions, and actions
What are the 3 groups of stakeholders
1- capital market stakeholders
2- product market stakeholders
3- organizational stakeholders
What is the trade-offs’ rationale
To minimize the amount of support the organization loses from unsatisfied stakeholders
Explain the capital market stakeholders
Shareholders and lenders expect a firm to preserve and enhance their wealth
Expected returns are correlated with the investments’ degree of risk
Who are the stakeholders of the product market stakeholders and what they want
1- customers: seek reliable products at the lowest prices
2- suppliers: seek loyal customers who are willing to pay the highest sustainable prices for products
3- host communities: (the national, state/province) want companies willing to be long-term employers and providers of tax revenue without placing excessive demands on public support services
4- unions: seek secure jobs and desirable working conditions for members
Product market stakeholders are generally satisfied when a firm’s profit margin reflects at least a balance between the returns to capital market stakeholders and the returns in which they share
Who are the organizational stakeholders and what they expect
1- employees:
Expect a dynamic, stimulating, and rewarding work environment
Generally, prefer to work for a growing company in which they can develop their skills
2- leaders:
Must use the firm’s human capital successfully to serve the day-to-day needs of stakeholders
Help a firm’s employees understand competition in the global competitive landscape through international assignments
What are the two perspectives on social responsibility
1- Milton Friedman 1970,2005
2- Byron 2003 and Carroll 1979
Milton Friedman perspective on social responsability
1- maximize profitability (as this serves economic efficiency)
2- argues against the concept of social responsibility as a fundamentally subversive doctrine
3- primary goal of business is profit maximization, so no spending shareholder money for altruistic goals as defined by manager. Indeed, business engages in open and free competition without deception or fraud
4- manager may use own income/ wealth for altruism but not shareholder wealth
Byron and Carroll perspective on social responsibility
Byron 2003: profits are a means not an end, so profits maximization cannot be main obligation of business
Carroll 1979: 4 responsibilities of business managers:
-economic: be profitable enough to reward creditors and shareholders
-legal: act legally
-ethical: follow ethical principles
-discretionary: follow discretionary responsibilities
Carroll’s four responsibilities of business
1- economic responsibilities: produce goods and services of value to society so that the firm may repay its creditors and increase the wealth of its shareholders
2- legal responsibilities: defined by governments in laws that management is expected to obey
3- ethical responsibilities: follow the general held beliefs about behaviour in a society
4- discretionary responsibilities: purely voluntary obligations a corporation assumes
What are the benefits received from being socially responsible
-charge premium prices
-enduring relationship with suppliers and distributors
-attracting outstanding employees
-being welcome in new markets
-support from public officials
-attract capital infusion from socially-concerned investors
What is the code of ethics purpose
-specifies how an organization expects its employees to behave while on the job
-clarifies company expectations of employee conduct in various situations
- makes clear that the company expects its people to recognize the ethical dimensions in decisions and action
What is the whistleblowers
A study shows from 1996 to 2004, 82% employees who reported fraud were ostracized, demoted, or pressured to quit
