Business and Society Essay Sample
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- Category: stakeholders
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Business and Society Essay Sample
Description of the company and analysis of the various primary and secondary stakeholder groups, their roles, and relationships The company I have chosen is Third Federal Bank. Third Federal Bank specializes in providing banking needs for a wide range of customers and is characterized as a medium sized public corporation. The services provided by the company cater to the financial needs of nearly all business groups. The company currently employees nearly 2,000 employees and records an annual turnover of $330 million. The company shares a vision of acquiring the market leader status in financial industry by offering innovative and quality services and financial products. The bank also enjoys a sound corporate social responsibility by funding a foundation which caters to the health related needs of individual children, who do not possess medical and insurance coverage. The role of the stockholder is to exercise voting rights based on share ownership and to exercise their rights to inspect the company books and records, they have the power to have a negative or positive influence on the company (Phillips & Freeman, 2010).
The relationship between the company and the creditors is that the creditors lend money to the company for working capital and collect payments of interest and principal from the company. The company’s creditors can have a negative influence on the company if it were to call in loans if payments are not made as arranged and utilized their legal authority to repossess or take over property in a severe delinquency situation. The relationship between the company and its suppliers is that they provide the supplies for example the service, energy, equipment, stationery and other supplies that are necessary for conducting business (Shonfield, 2001). The relationship between the company and its customers is very important. The role of the customer is to be willing to buy the company’s goods and services, if customers purchase goods from the competitors or were to boycott the company’s products this would have a negative impact for the business. The employees have a very important relationship to the organization, where the company helps them to maintain a stable employment and rewards them with a fair pay for their work in return of their skills and acumen. Employees as a group have union bargaining power and possess information about the company’s personnel, products and services that they could bring to the public attention that could have negative impact on the company.
The secondary stakeholders on the other hand can affect the company, even though they do not enjoy direct influence. This group includes the communities, nongovernmental organizations, the media, business support groups, governments and the general public. The community may play a role of working together with the company to achieve both the goals of the company and the community or by blocking its plans through lobbying for government regulations, or restricting licenses and permits (Phillips & Freeman, 2010). The relationship between the media and the company is important because the media has the ability to assist in creating a positive or negative image of the company. The media can play a role in publicizing events that affect the public negatively or positively (Shonfield, 2001). Government plays the role of adopting laws and regulations, issuing licenses and permits with the power to allow or disallow activities within the industry that would affect the company. The general public represents another secondary stakeholder which is a part of the environment in which the company operates. The role the general public plays is to press government for action on matters that concerns the general public and seeks to condemn or praise a company through support by activists (Phillips & Freeman, 2010; Shonfield, 2001).
Recommendation of ways the stakeholders can influence the destiny of the company in question The customers, suppliers, creditors and the employees as primary stakeholders in the company can influence the direction of the company by exercising economic power over the company. Since the main interest of customers to get a fair value and quality in exchange for the purchase price of goods and services then the company must listen to what their customer’s needs and make an effort to supply these needs. The stockholder has a very powerful position as a primary stakeholder in the company and can use its power as an owner of the company to offer suggestions to the direction the company should take on matters that support the stockholders interest (Phillips & Freeman, 2010). The suppliers wish to receive compensation for the products and services they provide. The suppliers can influence the direction of the company by providing the products and services that the company requires in a timely manner or they could hold supplies or refuse to fill orders if they feel that the company refuses to honor its contractual responsibilities.
The creditors have the ability to provide the financial support the company needs, like long-term financing and to structure loan facilities in keeping with the company’s cash flow needs in order to help the company achieve its financial goals (Shonfield, 2001). Employees can also use economic power over the company by refusing to work under certain conditions a form of economic power known as strike or slowdown, and operating in an organized group such as a union. The government, although a secondary stakeholder, can use its political power, through legislation or lawsuits to influence the direction of the company. The community activist and nongovernmental organizations may exercise political power by organizing themselves in protest if they believe that the company is not employing members of the community or if they think the company poses a threat to the environment (Phillips & Freeman, 2010).
Creation of a plan on how to encourage stakeholders to form a coalition to help you achieve your goals and anticipation of challenges in encouraging stakeholders to forming a coalition and the steps taken to overcome these challenges A coalition is an alliance among individuals or groups of individuals who agree to join forces and work together to achieve a shared goal, each looking after its own interests. This alliance may be temporary or depend on well conveniences quotas (Anshen, 1980). The aim of the coalition is to focus on specific problems and issues. This project with respect to the company in question will benefit the different stakeholders of the company and is a project that can involve all the stakeholders of the company (Wilke, 1985). The success of a coalition depends on achieving the predetermined objectives set by the coalition and in line with the interests of the company. When businesses invest time, money and effort in citizenship activities they often reap rewards in the form of enhanced reputation and legitimacy.
To encourage the stockholders to participate in the formation of the coalition would be to show them how by the company being involved in this venture would be a way to proactively build stakeholders partnership, provide an opportunity to discover business opportunities and turning vision into financial performance (Schwarz, 1970). The government has strong political power and through partnership with the company can strengthen its political position within the community. Government does have a responsibility to serve the needs of its citizens. Government by itself cannot address all the financial needs of individual regarding healthcare and through the establishment of partnership with the company would be able to assist in the alleviation of some of these problems (Anshen, 1980). In some cases, it is possible that competition may develop between groups. Coalition stakeholders may feel that the cost of participation is greater than the benefits it provides (Schwarz, 1970). As a result if the coalition is unable to provide on par benefits to the stakeholders or if the alliance demands significant investment of efforts and time, the coalition will gradually start to lose its worth (Wilke, 1985).
Anshen, M. (1980). Corporate strategies for social performance. New York: Macmillan. Phillips, R., & Freeman, R. E. (2010). Stakeholders. Cheltenham: Edward Elgar. Schwarz, P. J. (1970). Coalition bargaining. Ithaca: New York State School of Industrial and Labor Relations, Cornell University. Shonfield, D. (2001). The stakeholders. Huddersfield: Central. Wilke, H. A. M. (1985). Coalition formation. Amsterdam: North-Holland. http://www.thirdfedbank.com/