Business: Management and Different Stakeholders

You have been asked to produce an article on two contrasting businesses covering purpose, ownership, organisational structure, trategic planning and how businesses interact with their environments. Task 1 (Pl ,P3, P4) submtsston date: w,’C 7/10/13 Business organisations exist for many different purposes and have a range of aims and objectives. Privately owned businesses usually aim to make a profit for the owner(s); publicly owned organisations work to deliver services and there are many businesses employ staff and use other resources and are important to the economy ofa region.

As part of your duties you and three colleagues have been asked to produce a presentation to local Chamber of Commerce. You and your team members have been asked to research and compare one Public Sector Organisation and one Private Sector Organisation and produce a short PowerPoint presentation of the above of no more 10 minutes duration and of 8 to 12 slides. Covering the following areas: a) (Pl) Describe the type of business (what does the business/organisation do? b) (Pl) Describe the purpose and ownership (including liability for any business debts) of each business. c) (P3) Describe how two businesses are organised d) (P4) Explain how their style of organisation helps them to fulfil their purpose. note you will need to hand in a copy of the powerpoint and notes at the end of the presentation and answer questions from your tutor) Task 2 (p2) Submission date: wc 11/11/13 All organisations have groups or individuals who are said to be stakeholders in the business.

This means that they have an interest in the actions, performance or plans of the business. For example, a decision to move location affects staff, suppliers, neighbours and customers, all of whom are stakeholders. Produce an article for the paper covering the following: a) (P2) Describe the different stakeholders of each of he selected contrasting organisations. b) (P2) Describe how each one influences the purpose of each of the organisations. ) (MI) Explain the points of view of different stakeholders seeking to influence the aims and objectives of these two contrasting organisations. d) (Dl) Evaluate the influence different stakeholders exert in one of your chosen businesses.

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The implications for the business and stakeholders of a business operating ethically

Table of contents

For this task I have been asked to write the implications for a certain business and the stake holders of a business which is operating ethically. The business I have chosen to relate to is H&M.

Understand the implications of businesses operating ethically

Every business has a variety of stakeholders for instance H&M will have a number of stakeholders such as store managers, staff, customers and consumers each group will have interests in how the business is run on daily basis. Business owners are the key stakeholders they want and expect good financial performance from their investments in H&M, store managers know that their first priority is to deliver good financial results to keep the H&M owners pleased, their superiors will keep track off progress.

Shareholders

Shareholders are people who are involved in a business such as customers, consumers, suppliers and staffs all these are people are shareholders as they are involved in the business, an H&M shopper is a stakeholder as they are consuming products from

Employees

Citizen’s benefit from H&M activity during they provide labour force for business leaders to create wealth. When H&M hires employees they will need to follow certain laws that help workers from being exploited and made to work long hours, then be made redundant when they were no longer needed. H&M would have to provide satisfactory working conditions and that all workers will be kept safe from danger, they must also follow minimum wage. H&M have customers around the world over and H&M also struggle for diversity. People of a large number of nationalities work at H&M and they keep growing with new employees around the world. H&M also struggle for equality. In 2011, 79 percent of H&Ms employees were women. Women held 70 percent of the positions of responsibility within the company, such as store managers and country managers.

Customers, Suppliers and Competitors

In H&M they need to build relationships with their customers, suppliers and competitors as it is very important. H&M would need satisfied customers and suppliers which would come and do business with the firm. Decisions made in H&M could affect their competitors so they would need to make relationships with them. The increased purchasing costs also included other buying related costs connected to H&Ms long-term initiatives aimed at building an even stronger H&M. For example, strengthening H&Ms buying organisation and production offices with new employees and IT investments. H&M are doing this in order to give their customers an even bigger offering in the future.

H&M buys and sells products in a large number of countries. International trade plays an important part for the development of countries as it is a source of economic growth and helps lift people and nations out of poverty. H&M contributes to the creation of more than a million jobs for people around the world, a large number of them in Asia.

Citizens

H&M’s activity occurs within a community. So it is important that the local population is considered in major business decisions. H&M have national importance and their activities are very significant to members of communities. H&M is a powerful presence in many communities. It can have a considerable impact on traffic, new buildings, employments and established business. Somewhere else, but If H&M is predicted to do good they will get lots of investors trying to buy shares. H&M also attracts great interest around the world and their strong expansion continued in 2011. It grow by 10–15 percent new stores per year and in 2011 they had opened 266 new stores net, 16 more than planned. China, the US, the UK and Germany were the largest expansion markets. They also had opened stores in five new countries: Romania, Croatia and Singapore, as well as – via franchise – Morocco and Jordan. H&Ms Customer response has been incredibly positive everywhere.

Conflicts of interest between stakeholder groups

H&M today have to balance the aims of a number of stakeholders. This can be difficult because the interests of stakeholder groups can conflict with each other. As some stakeholders, such as shareholders have a financial interest in a business. It is in their interest that the shares in the business increase in value, so that their investments also increase. Other stakeholders in H&M such as environmentalists are people or groups that actively campaign on issues to do with protecting the natural environment. 

Read about H&M Sustainability Competitive Advantage

If H&M would release a new product and it goes well stakeholders will be very pleased that their cash investments looks like returning a healthy profit, however if an environmental group starts a campaign to prevent H&M in using children to make their clothes these two stakeholders would be in conflict. Success for environmentalists may mean a loss for shareholders. That said others may argue that, in the longer term, all business gain by protecting our environment.

Implications

Adapting Business Behaviour

Within our world the connection through each other is now better than it was 50 years ago, meaning the connection to each other is better, giving out messages and keeping each other up to date is now easy, For e.g. H&M will be able to keep to up to date on what is happening in their factories and will be aware of any new within seconds. H&M has factories all the way in Bangladesh, their messages from their will come to H&M employers quick so they will know what is happening over there instead of waiting to know what is happening, so they will be able to come up with solutions if they have any problems. Their behaviour will need to be positive at all times and their actions will need to be positive to keep the business going.

Responding to ethical pressures

The corporate social responsibility of businesses is a response to the growing pressures placed of managements to take account of ethical concerns. Therefore H&M managers have the pressure of ethical pressure as they have to make sure they are doing business ethically and also on the right path. The benefits for H&M when responding ethically are that they are doing business in the correct manner and are following laws and regulations. The drawback for H&M responding ethically is that it will be difficult for them to be on top of ethics.

Implementing ethical practices

Some well known names have begun to implement an ethical stance on issues that affect us all. For example walkers are working with consumer change in their mind as they have made changes to their product. Therefore H&M will have to bear in mind their consumer’s welfare when making products. The benefits for H&M is that they can make products knowing that they are making products for consumer’s needs. The drawback for H&M is that they have to bear in mind what consumers will think of their product and will it benefit them.

Influence of stakeholders and pressure groups

Corporate social responsibility is a response to external stakeholder’s pressure. It is also a response to pressure group campaigns and recognition that public disapproval could lead to commercial disaster. Businesses In pursuit of their primary goals cause damage to the planet. Environmental issues are on the focus in pressure groups which are a voluntary organisation that exists to create that will be listened to by decision makers everywhere. This includes business leaders and politicians. Therefore H&M will have conduct pressure groups to keep on top of environmental issues and the influence of their stakeholders. The benefits of this are they can deal with environmental issues effectively and impress stakeholders. The drawbacks of this are it can get out of hand and become a big concern for the business which they may have to close the business down.

H&Ms stakeholders

Shareholders

H&Ms stakeholders are shareholders because they hold the value of H&M. if H&M are doing well their value will rise. Shareholders will benefit from this as the business is prospering. The drawbacks of this are if H&M do not do well their value of their business will drop.

Customers

Customers are stakeholders because they use the service H&M provides. Therefore H&M is meeting customer’s needs and expectations. The benefits of this are if H&M provide a good service customers will return to them often. The drawbacks of this are if H&M does not meet customer’s expectation they will not obtain any customers and make huge losses. H&M also want to surprise their customers, for example by offering special collections and designer collaborations. Another example is that H&M had successful collaboration for autumn 2011, “Versace for H&M”. In February 2013 H&M launched “David Beckham Body wear”, an under wear collection for men. This was H&Ms two-year collaboration and their first collection has been very well received. H&Ms most recent guest designer collection, by the Italian label Marni in March, has also been highly appreciated.

Employees

Employees at H&M are H&Ms stakeholders because they work for the business they help the business run. The benefits of this are that they help H&M and in return they get paid. The drawbacks of this are that if they don’t contribute towards the business the business will not be able to run effectively. Also H&M has previously urged the government of Bangladesh to raise minimum wages for the country’s textile workers, and in 2010 the textiles workers wages were raised. But in order to achieve lasting improvements stability in the labour market is required and therefore H&M launched an initiative to improve the dialogue between the parties. But H&M are working actively to help strengthen workers’ influence over their own situation in order to enable them to themselves improve their conditions in the longer term.

Suppliers

Suppliers are H&Ms stakeholders because they supply goods to H&M. the benefits of this is that supplier help H&M run. The drawbacks of this are that without the supplier H&M will not be able to offer goods to their customers. However H&M do not own or operate factories but struggle for long-term relations with their suppliers in order to achieve lasting improvements. Wages in the supply chain are an important issue for H&M and at the same time a structural challenge for the garment manufacturing sector and other manufacturing industries. Therefore, in order to drive improvement, H&M cooperate with other companies and organisations to influence decision makers. For example, members of the Fair Wage Network, which monitors wage conditions in the garment manufacturing industry on a global basis. One of those countries is Bangladesh, an important buying market for us.

  • Impact on competiveness reputation and public image
  • This is boosting competiveness in the market by using global ethical concerns.
  • H&M will have to consider their energy, product, workplace and service to compete ethically in the marker. To prove they are a better business than others.
  • Complying with relevant legislation and codes of practice

H&M are determined to ensure that the objectives of the Code of Ethics are fulfilled. This applies to all H&M’s business dealings and transactions in all the countries in which H&M and their suppliers/ business partners operate. H&M informs, instructs and trains employees as well as suppliers/business partners to secure their compliance with the Code of Ethics.

Businesses must comply with large range of legislative regulations such as those relating to:

  • Health and safety
  • Employment
  • Planning
  • Environment and pollution

H&M must comply all of the above points to their business. But H&Ms want maintain pleasant and sustainable working environments throughout their operations. This includes ensuring that you as an employee have a safe workplace. H&M takes preventative measures to ensure the long-term safety and good health of their employees. H&M also encourage their employees to report accidents or unsafe working conditions to their manager

European Union (EU) laws

The European Union is a political and economic union of 27 nation states that encompass more than 490 million people. Ethical issue that affect us all are the subject of EU law. This law also covers issues such as employment and environmental pollution. Employment law is an illustration of EU influence in working conditions.

An EU directive tells a member state that it must implement law in a particular area. The 1993 directive lays down provision for maximum 48 hour working week including overtime, plus rest periods and breaks and a maximum of four weeks paid leave for employees. The UK government accepted the following conditions from the working time directive:

  • The worker can agree to do more than 48 hours
  • No worker should be disadvantaged by deciding not to opt out
  • The employer must keep record of all employees who carry out this work
  • Records must be kept available for authorities.

H&M are under the European Union law therefore they will have to accept all the conditions which are put forward to them. H&M should give priorities to their employees such as they can work up to 48 hours if they would like to do so but H&M cannot force employees to do this. If employees at H&M volunteer to do over time it is H&M duty to record this as they will need to show this information to higher authorities.

UN declaration of human rights

The United Nations declaration of human rights 1948 if for creating a better world, based on fairness and justice. The deceleration covers the questions of paid employment.

H&M respect Human rights in all their operations, H&M also are committed to respecting human rights in their operations, their supply chain and in the communities where they operate. H&M seek to avoid any negative human rights impact and H&M use their influence to promote the fulfilment of human rights.

Article 23 of UN Declaration of Human Rights

  • Everyone has the right to work, to free choice of employment, to just and favourable conditions of work, and to protect against unemployment. This is a right for all employees at H&M. H&M neither cannot forces any one to work with them. For example if an employee wants to work for H&M, they will have to consider them and see if they are fit for the business or if an employee wants to leave the business they could do so H&M have no right to stop them from leaving the business.
  • Everyone without any discrimination has the right to equal pay for equal work. It is H&Ms duty to pay all if they are doing the same type of job. For example if there were two employees who were working as a sales person they both should get paid equally no discrimination should take place.
  • Everyone who works has the right to just and favourable pay ensuring for themselves and their families an existence worthy of human dignity and other means of social protection. H&Ms employees have the right to ensure for themselves and their families that they are getting a good pay and they are relieving social protection.

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Stakeholders Influence

Stakeholders are all those who need to be considered in achieving project goals and whose participation and support are crucial to its success. Stakeholder analysis identifies all primary and secondary stakeholders who have a vested interest in the issues with which the project or policy is concerned. This information is used to assess how the interests of those stakeholders should be addressed in a project plan, policy, program, or other action. The goal of a stakeholder is to develop a strategic view of the human and institutional landscape, and the relationships between the different stakeholders and the issues they care about most.

Working with your key stakeholders to flesh out unambiguous and measurable objectives will set your program off on the right track. Stakeholders provide opportunities to further align business practices with societal needs and expectations, helping to drive long-term sustainability and shareholder value. Stakeholder s is intended to help the practitioners fully realize the benefits of stakeholder engagement in their organization, to compete in an increasingly complex and ever-changing business environment, while at the same time bringing about systemic change towards sustainable development.

Far West Elementary school is located in Far West in New Hampshire, which is a large metropolitan area with 2 million residents. Far West has a population of 30,000. Far West Elementary School has a student population of 700, 30% of the student having relocated from Asian countries within the last two years. Most of the student’s families are moving into the community to take advantage of the low income housing and are comforted by the presence of similar cultures. Many of the new residents have limited English writing, reading, and speaking skills.

The school mission is work together as a team to promote responsibility, self esteem, and achievement that will last for a lifetime. The goal of the school is to maintain a safe and caring public school for the children, staff and the community by teaching good character throughout the school. The needs and expectations of the groups in terms of Far West Elementary School is very important because we want to promote responsibility, self esteem, and academic achievement where differenced are valued and learning is a lifelong goal.

Children- The program of study for English at stage 1 aims to develop children’s independent and confident use of language in all its different forms in order to explore extend and allow reflection upon their experiences. As they develop as language users at stage 2, children learn to adapt their speaking, reading and writing to different situations, purposes and audiences across a range of genres, and learn to engage with more sophisticated layers of meaning. They also learn how language works.

Parents – Parents obviously need the training to be able to help their children to work on learning the English language. It will be good for the parents to participate in the class because they will learn both stages as well. This will help the parents interact with the teachers as well as helping their children at home with homework assignments. Instructors – The instructors play an important part in the whole program. It’s the instructor responsibility is to make sure the children as well as the parents get the proper training.

Being open and willing to learn about their students is a key component of teachers’ learning. But this does not mean simply reading a book on cultural differences or adding a unit on different family traditions. Although these can be helpful activities, they may do little to inform teachers about the students in their classrooms. They need support of administrators and policymakers, who nowadays sometimes treat teachers as little more than test givers. Teachers also need the support of the general public.

The funding institution that will fit Far West Elementary School program is called Fund for the Improvement of Education. This program supports significant program within a school. They administer grants and contracts to improve elementary and secondary education to meet state academic achievement standards. They also offer 3 million for a Teacher to Teacher Initiative that will help teachers of critical need language. If needed they also offer Teach for America, which recruit and train college graduates in communities what really need the help.

Their goal is to improve the quality of education, assist all content standards, and contribute to the achievement of the elementary students. What’s also included in the program is a set curriculum that the instructor will have to go by to teach the students and parents. This will give the instructors the opportunity to be able to work towards certification or licensed for bilingual teaching. Even thought the instructors are getting the training, they will still able to start the program at least one a week until their training is over so they can learn and teach at the same time.

The finding institution will also handle of cost of the training and the program for the students. The program includes the costs books for the instructors, children, and parents. To be able to continue to training for the program they have to report monthly reports for the institution so they can see how the program slowly falling into place. The funding institution will attempt to determine whether the program as implemented does what it is intended to do for the students and it is this determination of a true program that will impact the evaluation from other assessment.

This program will make a big impact on the school because they will be teaching the targeted children including their parents the fundamentals of English language. The children who are in the program will get a chance to participate in other activities within the school and will also help them communicate with other in their neighborhood. This will also help the parents interact with others in the community, help children with their homework, build an relationship with the teachers, and will also help them look for jobs as well. Find for the Improvement of Education will help the school reach a higher level within the state.

That will help increase more funds to help the school and if more Asian students come into the community. Reference Page Fund for the Improvement of Postsecondary Education. Retrieved March 29, 2010.. http://www. ed. psu. edu/Englishpds/inquiry/projects/gore04. htm Improve-Education. org. Retrieved March 29, 2010.. www. ed. psu. edu/Englishpds/inquiry/projects/gore04. htm Understanding Organizational Stakeholders for Design Success.. Retrieved March 29, 2010 http://www. boxesandarrows. com/view/understanding_organizational_stakeholders_for_design_success

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The Role of Stakeholders

Role of Stakeholder MGT/ 420 November 1, 2012 Roger Ellis Role of Stakeholder Quality management is an approach to managing a business that focuses not only on customers and profits, but also takes into consideration anyone who can influence the business to be more profitable. These might include employees, suppliers, investors, market analysts, government regulators and trade associations. These entities need to have a positive working relationship with one another and collaborate with each other to promote the business.

Lack of collaboration between them can cause issues with the success of the business itself (Susienes & Vanegas, 2005). Quality management considers the actions of stakeholders to be very important in the overall success of the operation. R. Edward Freeman defines a stakeholder as “anyone that can be affected by a company’s actions, objectives, and policies. This includes both internal stakeholders, such as employees and managers, and external stakeholders, such as shareholders, suppliers, customers, surrounding communities, creditors, the government” (DowellDoGood, 2012).

Stakeholders Stakeholders can be divided in two groups: internal stakeholders and external stakeholders. Internal stakeholders are the employees, from the upper managers to the production workers – anyone who works in the company and is a part of the business structure of the company itself. Internal stakeholders are also customers, suppliers, and shareholders. All of these groups make a difference in the growth of the company. Balancing these relationships that provide satisfaction in the long run is the focus of quality management structure.

Employees need satisfaction with fair salaries ad benefits packages, customers need quality products and fair prices, suppliers need the opportunity to sell and make a profit, and, finally, shareholders want a return on their investments. Organizing meetings, communicating through E-mail, letters, and seeking consensus on decisions made to facilitate each group’s needs, enable the business to have a common goal and smooth all internal and external conflicts. External stakeholders are the community, the government, business associations and political groups.

All of these groups can have a strong influence on a business, regulating policies, laws and influencing customers to buy a product or service. Also, they can influence shareholders to be investors in the business, making a difference in the value of the company itself (Susienes & Vanegas, 2005). Two Examples The Department of Health and Human Services provides regulations to govern care in hospitals, medical centers, etc. The stakeholders in this organization are: patients, providers, payers, and public health professionals. The patients’ interest is to be provided with excellent care.

FACCT (Foundation for Accountability) is an entity that addresses health care needs for the patient, and it is founded and lead by patients. IOM (Institute of Medicine) is a corporation that regulates the care delivered by providers. Medicare and Medicaid have programs that help patients to receive care and providers to be paid in order to continue operations. In addition, the National Committee of Quality Assurance and National Quality Forum assist in developing programs to improve health care, along with public health professionals who provide support by suggesting policies to improve care (HRSA, 2012).

Another example of stakeholders being very proactive and an integrant part of an organization is the Watershed issue in the United States. Natural resource organizations for all the states involve stakeholders as their staff and to foster support in the community. Stakeholders include local organizations tired of being inactive when their water reserves in the city are being contaminated or ruined by discharge from farms or wastewater treatment plants. Other stakeholders are national environmental groups that support the organization by traveling around the States and motivating people to support their cause.

Another organization of stakeholders is the business community – helping to save the environment by changing business operations to be environmentally safe and preserve water waste. Stakeholders also include government agencies which work as partners to preserve the watershed (Tonning & MacPherson, 2010). Conclusion Quality Management includes stakeholders in its structure as a vital element in the success of the business or organization that they are a part of.

Stakeholders are any person or group who can aid or are a part of the organization with the purpose of bringing greater success to the business. Quality Management utilizes both external and internal resources as stakeholders to ensure that their organization has the necessary support and aid, which would cost more money and time if these resources were purchased outright. Instead, due to the common interest in making the organization or business successful, this support is giving freely and with enthusiasm.

This kind of help is priceless, considering the ramifications of knowledge and networking that it can bring to an organization. Involving stakeholders is brilliant and very useful.

References Definition of Shareholders & Stakeholders. (2012). Do Well Do Good. Retrieved from http://dowelldogood. net/? p=545 HRSA U. S. Department of Health and Human Services. (2012). What are the roles of key stakeholders in QI? Retrieved from http://www. hrsa. gov/healthit/toolbox/HealthITAdoptiontoolbox/QualityImprovement/whatarerolesofkeystkholders. tml Susniene, D. , & Vanagas, P. (2005). ISSN 1392-2785 Engineering Economics2005. No 4 (44) Commerce of Engineering Decision- Integration of Total quality management into Stakeholders management Policy and Harmonization of their Interests. Retrieved from http://internet. ktu. lt/lt/mokslas/zurnalai/inzeko/44/1392-2758-2005-4-44-71. pdf Tonning, B. , & MacPherson, C. (2012). Getting in Step: Engaging and Involving Stakeholders in Waterwaste. Retrieved from http://cfpub. epa. gov/npstbx/files/stakeholderguide. pdf

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Stakeholders vs. Shareholders

The overarching business practices of large, publicly traded, companies are typically divided into two categories: shareholder- or stakeholder-driven. The US model for business has been overwhelmingly shareholder-driven for the last 15 years where most CEOs believe that their mission is to maximize shareholder value.

In other countries, suchas Japan and Germany, many companiesare managed using stakeholder-centered business practices (Inamori, 1997; Matsushita,1994; Nikkei, 2001a, b; Wessel, 2001). The success of the US economy in the late 1990s has propelled shareholders to pressure senior management for higher returns using US-style business practices (Taylor, 1999; Dvorak et al. , 2000; Shirouzu etal. , 2000; Shirouzu, 2000; Zaun, 2000; Wessel,2001).

Senior managers that are strongly influenced by shareholders, or otherwise adhere to a purely economic view of business, must make tradeoffs between other key stakeholders such as: employees, suppliers, customers, governments, or labor unions optimizing business performance along a single dimension, with principal accountability to only one stakeholder, suggests that success is best achieved by dividing, rather than leveraging, key stakeholders.

Importantly, local optimization diminishes senior management’s ability to develop an accurate view of reality. Having an accurate view of reality would result in the spontaneous and universal characterization of business as a socio socioeconomic activity. The true purpose of business would be clear and its course sustained over time with appropriate maintenance. But instead, witness theprevalence of business practices and metrics that distort reality or are divisive. Read about FedEx Stakeholders

Philosophical arguments are typically used to explore the validity of shareholder versus stakeholder views of business. While intellectually challenging, philosophical arguments may not be sufficient to persuade senior managers to change their behaviors. Further, the shareholder versus stakeholder debate is rooted in subjective thought, with concomitant biases and stereotypes. This results in artificial barriers that ensure superficial treatment of an issue that is of great importance to all people that work for a living.

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Focus on Profit Or Stakeholders Needs: Company’s Strategy

Stakeholders are individuals or groups who have an effect or are affected by the activities of an organisation. The stakeholder approach means that the business focuses on the needs of its main stakeholders. These can include the local community, employees, customers and suppliers and can focus on environmental issues, regular orders and security of employment. In contrast to this the shareholders approach focuses on giving a good sized dividend to shareholders, which means the business objectives would be based on getting more profit.

When Dyson moved its manufacturing to Malaysia to be closer to suppliers, it could be said that it was adopting a shareholder approach. The costs of production in the Far East would be cheaper, as would transporting the supplies from the suppliers to the factory. Wages would be much cheaper and so as a result of all these profit margins would be higher making Dyson able to give a better dividend to its shareholders.

In addition to this the move from Wiltshire to Malaysia caused over 800 job losses which would affect both employees who would have been made redundant and the local community as along with the 800+ job losses, there would be no future jobs available in the factory. After the move Dyson’s manufacturing costs have dropped significantly and as a result his profits have increased. This would mean that Dyson has more money to put into manufacturing, research and development and marketing and has the capital to pull itself through any recessions or drops in demand which can not be predicted or forecasted.

Dyson is in a much better position after the move than it was before. James Dyson said that the company may not exist at all today if it weren’t for the move. These points all suggest that a focus on shareholder dividends and therefore profits is the best way forward for a business. However this is not necessarily true. A business must focus on the wants and needs of its stakeholders as well for it to be successful in the long term. Dyson’s strategy of moving abroad may have helped the business through a tough time but that is only short term.

If the stakeholder’s needs were ignored the company’s image may suffer and it is more likely to be the target of pressure groups. In addition to this a poor image could mean that people do not want to be a part of the company and so recruiting could be more difficult. If a business took into consideration the needs of its employees as stakeholders and gave them job security, reasonable wages, job enrichment and motivation it would increase the morale of the workforce. This would lead to less absenteeism and boost productivity.

The greater commitment of the staff should then lead to better customer service and better product quality meaning customers would be happier with the product overall and would be more likely to make repeat purchases which would boost revenue and therefore profitability. As a result of the profitability boost, shareholders would be happier as their dividends may rise as would the value of the share. This in turn would please banks and other investors making it easier to get loans or overdrafts.

In addition to this the extra profit being gained could enable a business to put money into the community and give something back which should help build trust between the business and community. This could be of help if the business wants to put forward expansion plans for example as the community are more likely to agree. All of the above would put the business in quite a good position which would mean employees have job security and the cycle begins again. Unfortunately there is also a downside to the stakeholder approach.

As it is a long term approach it does not yield benefits as soon as the shareholder approach would. This means that it may not seem to be worth all the money it costs. As with everything there is an opportunity cost and the money spent implementing this approach could be used elsewhere, for example in marketing or product development. As well as this, managers may not be able to meet all the needs of its many stakeholders. This means making tough decisions and prioritising some groups above others which could cause problems.

In conclusion, I think we should look again at Dyson’s decision to move to Malaysia. Although it seemed like James Dyson was using a shareholder approach moving from the UK and causing many job losses, his success from this move means the company has more profit to feed into the community’s needs and it has enabled him to create another 100 jobs in Britain not in manufacturing but in more rewarding areas such as developing new products. In addition to this there is another, more in-direct advantage.

As a result of the lower production costs, the company pays more corporation tax which could be fed into hospitals or schools as well as other things aiding the community in general. I think focus purely on stakeholders would be a bad idea as it is such a long term approach, unless the business had sufficient funds to keep it going until the benefits could be gained, but it can be done as shown by OneWater who focus on helping bring clean water to overseas countries.

Similarly, a focus on shareholders alone would not be the best strategy as it could give the company a bad image and cause shareholders to sell up, lowering the share price as with BP in 2005 when an explosion at their Texas oil refinery killed 15 people. Overall, I believe that a company’s strategic decision-making should focus both on profit and stakeholder needs as this will give the business a positive image and gain the trust of its stakeholders while also raising the dividend for shareholders, possibly raising the share price as a result.

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Evaluate the Influence Different Stakeholders Exert in One Organisation

I am going to evaluate the influence that stakeholders exert on Zotefoams PLC. I will be evaluating the following stakeholders: customers, employees, shareholders, suppliers, the government and owners. Customers Customers contribute to profit levels and turnover through buying products and services. People are stakeholders in a company for financial reasons; customers do not want to have to spend an excessive amount of money to purchase a product, so if one of Zotefoams competitors can produce the same product for a lower price the customer may be tempted to change suppliers.

Without its customer Zotefoams would not exist, they survive through customer loyalty and their ability to attract new custom. To ensure that they get regular customers Zotefoams ensures that all of its products are the best on the market. Customer service is also held very highly. By offering these incentives Zotefoams are getting regular customers which bring in more profit which then can be used to help expand the business.

In the resent economic down-turn Zotefoams business customers have been demanding cheaper products, and with the risk of losing contacts worth millions of pounds Zotefoams has had to expand its manufacturing base with factories in the UK, USA and now in China. This diversity allows them created not only cheaper products but also more specialised one too. This has opened up a larger market for them which have increased their share prices by 50% in two years. This has all been brought on by the need to satisfy their existing customer and increase their potential one.

Employees Employee is any person hired by an employer to do a specific job. Employees are important as any other stakeholder because they have first contact with customers so if the customers want to ask a question about the organisation or about a product then the employees can help with that and that employees could also recommend products to customers which will bring in more profit. Employees must know about the customer service policy. If customers have a problem or an issue with a product or service then employees must know how to deal with it.

Zotefoams have business and public customer that require different levels of customer service. The advantage to having a customer service for the customers is that their needs and complaints will be responded to. In reality, there are several factors that influence how committed employees are to a company or organization. It has been proven that the more autonomy and responsibility that a job has, the less repetitive and dull that job also is and the more likely the worker is to enjoy and feel satisfied by the work.

Those individuals who feel stimulated, challenged and satisfied in their jobs are much more likely to be committed to a given work environment, company or organisation. Additionally, things like promotional opportunities, pay raises and chances for cross-training and advancement all encourage commitment. Those jobs or companies where there are fewer opportunities for promotion, advancement, and education tend to have higher turnover and less satisfied employees. In essence it is a very symbiotic relationship.

A business such as Zotefoams needs to employee a number of skilled employees to reach its business goals and likewise skilled employees would have the advantage of having a larger amount of employers to choose from. As a result the amount of influence employees have on a business is only (in my option) second to a business’s customer. Shareholders Shareholders are the owners of a company. They have the potential to profit if the company does well, but that comes with the potential to lose if the company does poorly. Shareholders can influence a business in many ways.

They can exert their influence by voting for particular directors or they can exert their influence by approving dividend payments at the AGM (Annual General Meeting). Shareholders play an important role in raising funds for organisations. So these figures create a great opportunity for all those who are looking for a profitable option to invest money. The main powers of the Annual General Meeting of shareholders are to approve and receive dividend proposals. An AGM (Annual General Meeting) is a meeting that official bodies and ssociations involving the public including companies with shareholders are often required by law to hold.

An AGM is held every year to elect the Board of Directors and inform their members of previous and future activities. It is an opportunity for the shareholders and partners to receive copies of the company’s accounts as well as reviewing financial information for the past year and asking any questions regarding the directions the business will take in the future. In reality (a company such as Zotefoams) the shareholders have little or no impact on virtually anything to do with the company.

Most companies have millions of shares outstanding and thousands of shareholders. The management generally makes all strategic decisions unless the decision involves raising funds through bonds or secondary offerings, along with potential mergers or acquisitions. Issues of that significance are presented to the Board of Directors by the management and decided by the Board. In general, management considers shareholders simply as investors, and that the shareholders are only concerned about the share price or dividend payout.

They know that it is virtually impossible for general shareholders to get 50% + 1 to change the board. That is not to say the company does not care about the shareholders. It simply assumes that the board and top management know the most about the company and therefore will automatically do what they believe is in the best interest for both the company and investor. External stakeholders-Suppliers Stock managers have trusted suppliers to supply them with the products they need to sell.

The suppliers should provide the products on time, however if not then stock managers will find new suppliers that are better than the ones they had previously. If stock managers and suppliers have a good relationship with one another then they would be happy to work with each other which means stock managers will have a reliable source of supplies and suppliers will have a reliable source of income. If suppliers are happy then they will be more motivated to help the business to achieve success and help the business run effectively. Suppliers must supply the stock managers with good quality products.

If however the products are bad quality then stock managers will find new suppliers and their previous suppliers will lose customers and they would get a bad reputation which means all their other customers will find new suppliers too. Zotefoams suppliers influence the business by making sure they have the right amount of stock delivered at the right time. If their suppliers do not supply high quality goods this would be a disadvantage. This could lead to a reduction of customers. The Government The government sets corporate tax rates for businesses so that they pay their taxes.

This way, a business can make its contribution towards the society. As a result, the government uses this money for economic growth and development. Paying taxes help these businesses to streamline their processes, as a result of more efficient infrastructure and management. The taxes paid also assist in supporting backward countries, so that overall demand of their products is not only restrained to UK, but includes exports to these nations too. Government laws are there to handle disputes, errors or poor judgment of a given person.

In any society, disagreement between employees can break down a healthy structure, so the laws are in place to attempt to guarantee equal rights to each member. Conclusion My conclusion is that there are a number of different stakeholders that hold different levels of influences on Zotefoams. But in my option out of all of Zotefoams (or any business) stakeholders its customer would hold the most influence, because after all a business cannot operate without its customers. By looking at a number of case studies (1) you can see a direct link between poor PR/ customer service and a company stock prices and sales.

In November 2011 Shares of Abercrombie & Fitch plunged more than 15% in one day resulting from a PR disaster. This is evidences that if a company do not reflect the wishes of its customer or delivers poor service/goods there can be a massive negative effect on the business. Another example of how customers can effect business operations is the disastrous speech made by CEO Gerald Ratner of The Ratner Group. After making a speech in which he jokingly denigrated the company’s products as “tacky” he nearly caused the company’s near collapse. The company’s stakeholders are very important to keep the business up and running.

A company’s stakeholders are all important but in handling its stakeholders, a business also has to accept that it will have to make choices. It is rare that “win-win” solutions can be found for key business decisions. Almost certainly the business cannot meet the needs of every stakeholder group and most decisions will end up being “win-lose”: i. e. supporting one stakeholder means another misses out. There are often areas where stakeholder interests are aligned, where a decision can benefit more than one stakeholder group. In other cases, there is a clear conflict of interest.

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