Slide- CH 3

• Introduction to Stakeholder Theory:

  • Business is influenced by stakeholders
  • Stakeholders can influence and be influenced by the organization's purpose
  • Stakeholders have different goals and influence
• Managers' role in relation to stakeholders:

  • Recognize the role of managers in relation to stakeholders
  • Formulate arguments supporting and opposing the stakeholder concept
• Pluralistic society:

  • Influence or power is decentralized among a variety of institutions
  • No institution is completely independent, but each has some autonomy to pursue its interests
• Stakeholders are individuals or groups who can influence and/or are influenced by the achievement of an organization's purpose
• Freeman (1984) emphasized that managers must systematically take stakeholders into account for effective management
• Stakeholders can include:

  • Owners
  • Directors
  • Employees
  • Customers
  • Lenders
  • Suppliers
  • Competitors
  • Government
  • Society at large
• Managers must:

  • Identify stakeholders to obtain resources and maintain business legitimacy
• Categorizing stakeholders:

  • Stakeholders can be external or internal to the organization
  • Stakeholders can be normative (with obligations) or derivative (with power over the corporation)
• Arguments against the stakeholder concept:

  • Problems of categorization
  • Challenges in meeting expectations
  • Dilution of top management focus
  • Impracticality of shared governance
• Arguments for the stakeholder concept:

  • Responding to stakeholders is good business practice
  • Ignoring stakeholder interests can have economic consequences
  • Identifies the full range of individuals and groups from whom loyalty is needed
• The stakeholder concept is a systematic approach to recognizing and responding to the complex combination of desires and expectations in society
• Issues Management Process:

  • Identification of issues
  • Analysis of issues
  • Ranking or prioritizing of issues
  • Formulating issue response
  • Implementing issue response
  • Monitoring and evaluating issue response
• Attachment is a strong reciprocal emotional bond between an infant and a primary caregiver
• Schaffer and Emerson's 1964 study on attachment aimed to identify stages of attachment and find a pattern in the development of attachment between infants and parents
• Participants in the study were 60 babies from Glasgow, and the procedure involved analyzing interactions between infants and carers
• Findings from the study showed that babies of parents or carers who displayed 'sensitive responsiveness' were more likely to have formed an attachment
• Freud's superego is the moral component of the psyche, representing internalized societal values and standards
• Issues can be viewed in two dimensions: over time and degree of awareness
• Stages in the degree of awareness of issues include: none or little, increasing, prominent, peak, declining
• Key Issues Facing Canadian Companies in 2016:

  • Mapping the Issues
  • Puma 2013 Annual Report highlighted the 'Sustainability Imperative' magnified by concerns about climate change, industrial pollution, food safety, and natural resource depletion
• David Lubin and Daniel Esty emphasized climate change as the defining issue of our time, urging urgent action to prevent global temperature increase
• U.N. Secretary General Ban Ki-moon warned about the limited time to address environmentally harmful activities and prevent a global temperature increase
• D. Kiron et al. discussed sustainability's next frontier, emphasizing the importance of sustainability in business practices
• As a manager, strategies to increase energy efficiency in a company include savings on lighting, revenue from selling excess energy back to the grid, factor four savings, and more
• Examples of companies like Walmart, UPS, and Cisco Systems saving significant amounts annually through energy efficiency strategies
• IBM's energy-efficiency strategy saved $126 million over 4 years and reduced energy consumption by 6.4% each year from 2009 to 2012
• Strategies to reduce waste in a company include repurposing waste for revenue generation, decreasing waste generated per vehicle, and recycling or reusing waste materials
• Examples of companies like GM, Unilever, and P&G achieving zero waste goals and creating value through waste reduction initiatives
• Puma's Environmental Profit and Loss Statement highlighted the impact on ecosystems and the need for environmental responsibility
• Purposes of Issues Management include maintaining a competitive advantage, aligning corporate behavior with societal expectations, and reducing vulnerability
• Benefits of Issues Management include detecting issues earlier, developing appropriate responses sooner, and enhancing credibility
• Crisis management involves planning and removing risk and uncertainty to achieve more control over events during a crisis
• Fink's 'anatomy of a crisis' highlights the unstable nature of crises and the importance of crisis management in dealing with uncertainties
• Corporations must be prepared for crises, invest in proactive approaches, communicate transparently with stakeholders, and prioritize honesty and empathy in crisis situations