Title
Running Head: CONCEPT OF STAKEHOLDER MANAGEMENT 1
CONCEPT OF STAKEHOLDER MANAGEMENT 2
Concept of Stakeholder Management.
Students Name:
Professors Name:
Date.
1. Provide a paragraph summarizing the concept of stakeholder management based on your readings.
The main objective of any organization or business entity is to ensure that they maximally utilize the shareholders wealth to improve their productivity and profit at large. Unlike the traditional era when stakeholders never meant much to business companies and organizations, the current world of business has changed perception as the stakeholders have been found to pose a great impact to any business (Kahootz, 2020). Generally, stakeholders are people who with varied interest on a given business they are involved in. therefore the concept of the concept of stakeholder management holds that maintenance of a good relationship with people who impact on ones business is the key towards the success business
As explained by the concepts of stakeholder theory, business entities need to concentrate their efforts on facilitating a good link between their firm and other people, both internally and externally (Kahootz, 2020). Stakeholders can be either supplier, employees, non-profit groups, government, local community customers as well as customers through at some extent competitors may also be teamed as stakeholders with this scenario where the corporatization is intending to off-shore its manufacturing facilities to developing countries an idea that will save some money for labor. Perhaps the issues of changing the companys marketing ads will pose adverse impacts on the stakeholders.
2. How do you think the following stakeholder groups in the above scenario will be impacted?
Employees/unions.
Due to change intended to be initiated by the corporation, many of the employees will be impacted negatively since the aim of the change is to reduce labor costs. In a nutshell, many employees will lose their jobs sinks the company will have to relocate some of its activities that benefited employees and perhaps fulfilled the local demand. Additionally, the disruption that will be created will also affect the consumers due to delayed deliveries. Other than employees, the union’s good relations with the company may be hampered since the unions may take their obligation to sue the said company to fight for and n protect employees’ rights.
Communities.
Since the local community may be assuming as an integral part of the companys market, the company’s actions to change some of its activities will make the community less valued and affect their willingness and desire to buy goods and services from the company. Additionally, community benefits like job opportunities will decline, which make lead to negative impacts on the living standards of the communities (Harrison, 2017).
Stockholders.
Stockholders will be impacted positively by the initiative since they will be able to save money as a result of the reduced cost of labor. Nevertheless, they will also have to incur some extra expenses on transportation costs as well as paying more to the administrators (Ebenstein, Harrison, McMillan, & Phillips, 2011). Another effect may be the loss of profits, which will drastically reduce the creation of shareholders wealth due to the declined value of shares.
3. What would you recommend the employer described above should do?
I recommend that the company consider the effects of its action on the domestic shareholders since the world market may not sufficiently sustain the companies’ needs to meet its objectives (Ebenstein, Harrison, McMillan, & Phillips, 2011). I also recommend that the employer to consider the job security of the entire employee team to avoid termination of a few members in case of any further new changes. Finally, the employer should consider the effects of foreign wages, trade barriers, and the US dollar position before initiating new changes.
References
Ebenstein,A., Harrison,A., McMillan,M., & Phillips,S. (2011). Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys.Policy Research Working Papers. doi:10.1596/1813-9450-5750
Harrison,J.S. (n.d.). Stakeholder Theory in Strategic Management: A Retrospective.Stakeholder Theory. doi:10.4337/9780857936349.00009
Kahootz. (2020, February 12). The importance of stakeholders in project management success. Retrieved from https://www.kahootz.com/why-stakeholder-management-is-an-important-part-of-project-management/
