Stakeholders
People who have a "stake" or claim in some aspect of a company's products, operations, markets, industry, and outcomes.
Primary Stakeholders
Those whose continued association is absolutely necessary for a firm's survival.
Secondary Stakeholders
Do not typically engage in transactions with a company and are therefore not essential to its survival.
Stakeholder Interaction Model
There are reciprocal relationships between the firm and a host of stakeholders.
Stakeholder Orientation
The degree to which a firm understands and addresses stakeholder demands
Corporate Citizenship
Often used to express the extent to which businesses strategically meet the economic, legal, ethical, and philanthropic responsibilities placed on them by various stakeholders.
Reputation
One of an organization;s greatest intangible assets with tangible value.
Corporate Governance
Involves the development of formal systems of accountability, oversight, and control
Shareholder Model of Corporate Governance
Founded in classic economic precepts including the goal of maximizing wealth for investors and owners. It also focuses on developing and improving the formal system for maintaining performance accountability between top management and the firm's sharehold
Stakeholder Model of Corporate Governance
Adopts a broader view of the purpose of business, where the business has a responsibility for economic success and viability to satisfy its stockholders. Because of limited resources, companies must determine which of their stakeholders are primary. This
Interlocking Directorate
The concept of board members being linked to more than one company
Executive Compensation
One of the biggest issues corporate boards of directors face
Steps found effective in utilizing the stakeholder framework to manage responsibility and business ethics
Assessing the Corporate Culture, Identifying Stakeholder Groups, Identify Stakeholder Issues, Assessing Organizational Commitment to Social Responsibility, Identifying Resources and Determining Urgency, and Gaining Stakeholder Feedback
Three Steps of the Stakeholder Theory
Normative, Descriptive, and Instrumental
Normative
Principles and values help identify ethical guidelines that dictate how to treat stakeholders
Description
Focuses on actual behavior, addressing decisions and strategies in stakeholder relationships
Instrumental
Examines stakeholder relationships and describes outcomes for particular behaviors.
Four levels of responsibility
Economic, Legal, Ethical, and Philanthropic
Accountability
How closely workplace decisions align with a firm's strategic direction
Oversight
A system of checks and balances to minimize opportunities for misconduct
Control
The process of auditing and improving organizational decisions and actions