The Corporation And Its Stakeholders Flashcards
Give a summary of valeant pharmaceuticals.
Also, what was their sale strategy?
A company that increased prices of pharmaceuticals using as philosophy the “stockholder” theory, saying that they were attributing the appropriate values to the drugs that their investors would want them to.
Their sales strategy was to minimize costs by buying existing companies and cost cutting, together with price hikes. They cut costs by laying off employees after acquiring companies.
Also used as an excuse that patients were covered by insurance.
Wyhat is the relationship between business and society ?
Managers have to 5ink about how their decisions affect members of society, as a business is a part of society.
What is the purpose of a company?
It is a company’s fundamental reason for being, what is does every day to create value for stakeholders, profits may be aligned wi5 purpose, but it goes beyond this concept.
What is the difference between the stakeholder concept and the stockholder concept?
The stakeholder concept includes the idea that corporations need to create value for society, accountability is key towards stakeholders, all of their interests need to be taken into account.
The stockholder concepts moves more towards the idea that a company is of its owners, and it needs to move according to what benefits the stockholders. Purpose is mainly to create profits.
What type of stakeholders are there ?
Market, non market, internal, non internal
What are the 4 types of power that stakeholders may have?
Voting power, financial power, legal power, informational power.
State the market stakeholders and their interest and power. (6)
Employees want stable employment and a fair pay. Strike, publicity.
Shareholders want ROI, stock value. Inspect company books, voting rights.
Customers want value and quality, they can purchase from competitors.
Suppliers want regular orders for goods and to be paid promptly, they can refuse to meet orders.
Retailers want quality products at a good price. They can buy from other suppliers.
Creditors want repayment for loans, they can call in loans.
State the non market stakeholders and their power. (6)
Communities want employment, protect local environments. They can lobby government for regulation.
NGOs want social and economic development. They can lobby the government for regulations.
Business support groups want research and information, they can provide legal and group support.
Governments want economic and social development , they can impose legislations and regulations, allowing or disallowing economic activity.
The general public wants social values to be protected and they can condemn or praise publicly a business.
Competitors want to compete fairly and they can press the government or sue companies.
State the non market stakeholders and their power. (6)
Communities want employment, protect local environments. They can lobby government for regulation.
NGOs want social and economic development. They can lobby the government for regulations.
Business support groups want research and information, they can provide legal and group support.
Governments want economic and social development , they can impose legislations and regulations, allowing or disallowing economic activity.
The general public wants social values to be protected and they can condemn or praise publicly a business.
Competitors want to compete fairly and they can press the government or sue companies.
