Introduction
Stakeholder theory was given by R. Edward Freeman, which was expressed many ways to represent the stakeholder as an important part of the corporate responsibility. According to Stenberg (1996), this stakeholder theory, is basically not capable to provide better corporate governance. He also stated that, this theory is unable to provide a better view of business performance (Edward & Reed, 1983).
Currently, the stakeholder theory has been grown up from its origin and seen as the concept of Value Maximization in the business firm. It is one of the important goals of the business organization (Werther & Chandler, 2005). In the present time, stakeholder theory allows the business firms to define the role and responsibility of
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This group is also known as the workforce of the company. The employees follow the duty, which are mention in their job description.
The role of external stakeholders is also plays an important role in the growth of the business firm. The biggest group of external stakeholders in a firm is the group of customers. This group is also known as the primary stakeholders of the firm (Frémond, 2005). Customers mean, the consumers, who use the services and products of the firm and invest their money in the development of the organization (Werther & Chandler, 2005). It is the primary responsibility of the firm to satisfy the customers, because high customer satisfaction allows the firm to enjoy good profits.
Another group of external stakeholders are suppliers, who provide raw material and other important components and part to the firm to produce final products and services. Suppliers affect the efficiency and ability of the firm to attract the customers (Brooks, Mllne & Johansson, 2002).
Government is the stakeholders that increase the ability of the firm to compete in the fair and free trade environment. These stakeholders also allow the firm to concentrates on the ethical and integral business practices and welfare of the employees as well as the customers (Jones, 2004). The government defines regulations and work practices for the business firm and also give punishments to those business organization, which breaks
Firstly Stakeholder is an individual or a group who has an interest in the success of a business I delivering high results and maintaining the viability of the business’s products and services.There are internal and external
Suppliers want steady orders and prompt payment, they also want to feel valued by the company that they supply.
A stakeholder is a person or a group of individual who are interested in the success of a business in delivering successful results and maintaining the activity of the businesses products and services. There are internal and external stakeholders in every company. An internal stakeholder is someone who is internally connected to the business that have personal interests which they may follow. An external stakeholder can be a person or a group of people such as investors, customers, suppliers, people who are predisposed by the business but are not fully in the business.
Stakeholders are those individuals who may be affected or have an effect in an organizations depending on the decisions that may have been made. One of the most important reason for identifying and understanding shareholders is that it allows the organization to recruit them as part of the effort in anything there are involved in. participatory effort and representation of as many stakeholders as possible ranging from internal to external has possible advantage. Internal stakeholder is a groups within an organization who work directly within the organization, such as employees, owners, and investors. In the other case external stakeholders
Stakeholder theory looks at the relationships between an organization and others in its internal and external environment. It also looks at how these relationships affect how the organization conducts its activities. You can think of a stakeholder as a person or organization that can affect or be affected by your organization. Stakeholders can come from inside or outside of the
The stakeholder theory made popular by Ed Freeman (1984) does seem to represent a major advance over the classical view (Freeman, 1984). It might seem inappropriate to refer to the stakeholder position as neoclassical. Bowie (1991: 56-66) has defined stakeholders as a group whose existence was necessary for the survival of the firm--stockholders, employees, customers, suppliers, the local community, and managers themselves.
Stakeholders have a significant influence on the aims of an organisation. They are the people who are affected by or interested in the business. In some organisations the shareholders are stakeholders, and at times have some of the decision power. In trade organisations, customers are also considered stakeholders; therefore their needs are part of the organisation’s overall objectives.
A stakeholder is a party that has an interest in a company. It may affect by the business or organization actions. Typically, the prime stakeholders are customers and employees. Patagonia is eco-friendly clothes are gaining the support of consumers and non-governmental organizations in the U.S. Since the company is a certified B Corp, they provide workers with certain benefits, the community and the environment. Patagonia outdoor clothing and gear retailer is well known for sustainability. They protect the environment and inspire social change. The company overall environmental and social performance is measured and independently verified a third party. Patagonia believes that full of practice transparency will be the ones in the future rewarded
A stakeholder is someone who someone who benefits or is burdened by a corporation, or someone who the corporation benefits or is burdened by. (Steiner). Stakeholders are represented by two main groups; primary and secondary
The suppliers provide the goods and services used by Beamish to create their primarily their product but sometimes also their service. They have a major influence on the business; if they were unable to deliver their supplies then this could have a detrimental effect on Beamish being able to operate
In general ,the stakeholder approach may be more conducive to balancing a wide variety of corporate interests and thereby discouraging impropriety.Executives and boards should take the perceptions of both shareholders and stakeholders into account when formulating strategy and enunciate their stance in all organizational communications. Only within that kind of clearly delineated context, can managers be expected to make appropriate decisions. Indeed, some of the most successful businesses are those which have embraced stakeholder values for example Bodyshop. However, we see that generally, shareholder value
Stakeholders can be divided into internal and external claimants. Internal claimants include shareholders and employees including the managers of the firm. External claimants typically comprise customers, suppliers, bankers, competitors, governments, trade unions, alliance partners, communities and the general public. Looking further into external stakeholders one could, also include the environment.
* Customers – Customers is external stakeholders for all organization or firm. Without any customers a company cannot be process. Customers have power to choose their necessary service and products. Seller and marketing cannot force customer to purchase product and service. Example, insurance customers have many choices when they need to purchase insurance. That mean consumers can buy insurance in different company like Tesco Bank, Lloyd Bank, HSBC and other company.
This paper will have a detailed discussion on the shareholder theory of Milton Friedman and the stakeholder theory of Edward Freeman. Friedman argued that “neo-classical economic theory suggests that the purpose of the organisations is to make profits in their accountability to themselves and their shareholders and that only by doing so can business contribute to wealth for itself and society at large”. On the other hand, the theory of stakeholder suggests that the managers of an organisation do not only have the duty towards the firm’s shareholders; rather towards the individuals and constituencies who contribute to the company’s wealth, capacity and activities. These individuals or constituencies can be the shareholders, employees,
The stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization. Creating a balance of all stakeholders including employees, stockholders, customers, owners, and the community is important. It is recommended that Family Dollar make an effort to consistently and ethically value and balance the interests of its stakeholders in their decision-making process. This will help to redefine the purpose of the company. This balance serves to let stakeholders know that the sole purpose of the company is not to just turn