Key Term Stakeholdres Essay

In this assignment I will be discussing the main topic stakeholder theory, what it means to a company and how it relates to the Ginsters Company. I will also be writing about the main stakeholders in the Ginsters Company and carrying out an analysis on the company’s main stakeholders and how the company approaches the corporate social responsibility.

They are concerned about the company’s profitability and stability, which affect the ability of the company to pay salaries and provide employee with benefits. They may also be interested in its financial position and performance in regards to their career development opportunities.

In this assignment I will be evaluating the influence different stakeholders have in one organisation. A stakeholder is someone who takes an interest in a business whether it being small or big. For example, in Nike, a stakeholder could be an employee or a customer as they would have to take massive interest in the business.

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,

Nowadays Corporation has become one of the very powerful institution around the world. They have reached everywhere across the globe with different sizes and capabilities. The governance of corporate has a major effect on economies. There is a huge loss of trust from shareholders and the market value is affected tremendously. Due to the globalization, the govern role has lessen which means more need for accountability. (Crane and Matten, 2007) Corporate governance has become an important factor in managing organizations in the current global and complex environment. Corporate governance a set of processes and structures for controlling and directing an organization. It constitutes a set of rules, which governs the relationships (Middle Eastern Finance and Economics - Issue 4, 2009) between management, shareholders and stakeholders (Ching 2006). Currently, due to the corporate failures corporate are scared to admit it. It includes various and all kinds of organizations and its definition could cover various economical and non-economic activities. It is important to keep in mind the influences firm have and by which its effected in order to have better understanding of governance. In this

There is a Chinese proverb that a fish rots from the head. This statement underlies the importance of leadership in any organized activity. In understanding the dichotomy between shareholders and management it is critical to define exactly what the role of the shareholder encompasses. According to Fama (1980), a shareholder is an individual that owns a part of a public or private corporation. To fulfill their role, shareholders must have certain skill sets to allow them to make good decisions for the firm. First, they must be comfortable in an authority position while being able to provide constructive

Corporate governance is a set of actions used to handle the relationship between stakeholders by determining and controlling the strategic direction and performance of the organization. Corporate governance major concern is making sure that the strategic decisions are effective and that it paves the way towards strategic competitiveness. (Hitt, Ireland, Hoskisson, 2017, p. 310). In today’s corporation, the primary objective of corporate governance is to align top-level manager’s and stakeholders interest. That is why corporate governance is involved when there is a conflict of interest between with the owners, managers, and members of the board of directors (Hitt, Ireland, Hoskisson, 2017, p. 310-311).

| The customers would be influenced because if the company are financially struggling the customers are there only hope to stay profiting. If the company was to go bust it means customers will no longer be able to shop there. The customers would be an external stakeholder, they can get information by advertisements and even check their annual report on the businesses website.

Corporate governance is a critical concept in the commercial world of today with the idea originating initially from the U.S. The importance of corporate governance is made more considerable due to the increasing influence and consequences companies have on the daily lives of individuals and making up a large proportion of economic activity. Corporate governance can be shortly described as the whole framework within which companies operate. It is most likely the case that the shareholder value principle was not the only part of corporate governance which contributed to the

This paper specifically tries to distinguish between shareholder and stakeholder in business context. Firstly, there will be analysed main ideas of stakeholder theory, main principles of it. Secondly, the importance and characteristics of stakeholder interdependence will be shown. Thirdly, clear identification of main stakeholder groups and relationship between those groups will be outlined. In order, to distinguish shareholders from other stakeholders there will be paragraph analysing identity of this group. This analysis is followed by exceptionally important rights of shareholders which are giving them power to influence both company’s direction and through this other stakeholders.

A)Corporate Governance is a structure of the company by balancing all the individual, corporation and society interest. It also helps to create relationship between company board, shareholder and stakeholder and have proper functioning of organization to prevent fraud. Board of director in the company is being appointed by the shareholder and was been audit by them if the director managing and operating the business well by reporting or having general meeting. The responsible of the board of director are achieving the company objective, provide leadership and supervising the management and reporting the shareholder about the achievement and problem. All action of the board are subject to laws, regulations and shareholder. There are various theories that underline the development of corporate governance which include Agency theory, Stakeholder theory, Stewardship theory, etc.

For the purpose of this report, corporate governance is defined as the relationship that exists between company management, stakeholders and the board. Objectives of the company are usually set, attained and monitored through the structure corporate governance provides. (Balgobin 2008).The Guyana Corporate Code of Governance is similar to the UK codes of corporate governance and the Organisation for Economic Co-operation and Development (OECD 2004).These principles serve as a reference point that can be used by companies to develop their own frameworks for corporate governance that reflect their own circumstances or situations.

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.

Stakeholders are the group or number of people who are directly or indirectly related to a particular business. Stakeholders can be directors, customers, employees, government, agencies, owners, suppliers, unions and the community from which the business draws its resources (Campbell, 2002). However, stakeholders are a crucial part for the success of business. If an organisation knows it’s stakeholder, then it can determine where, there is prospect for business and also by analysing stakeholders, business can set its operational activities (Graham, 2005).

The fundamental issue in stakeholder management is to specify stakeholders or answer this question that who stakeholders are. There is not much agreement on stakeholder definition among researchers and project management experts. Mitchel states that various concepts in relation to stakeholder definition is due to their views to organisation or firm. So there are narrow and broad definitions. For instance, Freeman’s definition is broad one. He defines stakeholder as any group or individual who can affect or be affected by the achievement of organisation or firm’s objectives. In contrast, Clarkson has narrower view as he considers risk for stakeholder concept. He believes this risk is due to form of investment in that firm. In fact, basis of narrow view can be due to limitation in resources, budget, time or form of organisation’s asset. PMBOK’s stakeholder definition is similar to Freeman’s definition. The only difference is that organisation is also can be a stakeholder and influence or impact can be due to decision or outcome of a project.