The Leadership Of A Company

Decent Essays

Various stakeholder groups may possess the power to impact the success of a company. This is why it’s extremely important for business leaders to consider the company’s stakeholders during the decision making process, and to fully understand how a decision may impact the stakeholder’s value in the company. A stakeholder’s value is defined differently amongst the various stakeholder groups, and will depend upon what they are willing to sacrifice in the pursuit of the value they seek. For example, a community may be willing to sacrifice an increase in local noise levels in pursuit of the economic benefit a company would bring to the local area, while an investor may sacrifice their initial investment for a promise of a 20% return on that investment. As a business leader, one must understand the stakeholder management is imperative to the success of a company. In the provided scenario, a public corporation is considering whether to off-shore its manufacturing facilities to a poor nation in an attempt to save on labor costs, and increase its bottom-line. Regarding this scenario one must understand the concept of stakeholder management; possess the ability to identify how this decision would impact the various stakeholder groups (employees/unions, communities, and stockholders), and also offer a recommendation as to what the company should do in the provided situation.

What is the concept of stakeholder management? The traditional view of a company indicates that

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