Stakeholders
Customers, investors, shareholders, employees, suppliers, government agencies, communities, and many others 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
A model that shows the reciprocal relationships between the firm and a host of stakeholders. Recognizes other stakeholders and explicitly acknowledges that a
dialogue
exists between a firm's internal and external environments.
Stakeholder Orientation
The degree to which a firm understands and addresses stakeholder demands.
Social Responsibility
A company's obligation to maximize its positive impact and minimize its negative impact on society.
Four Levels of Social Responsibility
Economic, Legal, Ethical, and Philanthropic
Business Ethics
Principles and values that meet the expectations of stakeholders.
Corporate Citizenship
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. Value is
difficult to quantify,
but it is important.
Corporate Governance
The development of formal systems of accountability, oversight, and control.
Accountability
How closely workplace decisions are aligned with a firm's stated strategic decision and its compliance with ethical and legal considerations.
Oversight
A system of
checks and balances
that
limit
employees' and managers' opportunities to
deviate
from policies and strategies that prevent unethical and illegal activities
Control
The process of
auditing and improving
organizational decisions and actions.
Shareholder Model of Corporate Governance
Founded in classic economic precepts, including the goal of
maximizing wealth for investors and owners.
Serving the best interests of its
investors
Stakeholder Model of Corporate Governance
Adopts a broader view of the purpose of business. A company doesn't just answer for economic reasons, but also to employees, suppliers, government regulators, communities, and special interest groups.
Understands that the company must answer to
OTHER stak
Interlocking Directorate
The concept of board members of linked to more than one company.
Process is
legal unless
it involves a
direct competitor
Executive Compensation
One of the biggest issues corporate board of directors face, deciding how much to compensate top executives. How executives are compensated for their leadership, organizational service, and performance has become a controversial topic.
Assessing the Corporate Culture
Step One of Implementing a Stakeholder Perspective
Identify the organizational mission, values, and norms likely to have
implications for social responsibility
Identifying the Stakeholder Groups
Step Two of Implementing a Stakeholder Perspective
Recognizing stakeholder needs, wants, and desires.
Identifying Stakeholder Issues
Step Three of Implementing a Stakeholder Perspective
Assessing Organizational Commitment to Social Responsibility
Step Four of Implementing a Stakeholder Perspective
Identifying Resources and Determining Urgency
Step Five of Implementing a Stakeholder Perspective
Gaining Stakeholder Feedback
Step Six of Implementing a Stakeholder Perspective