Another aspect is the stakeholder concept. This aspect supposes that businesses come into regular contact with customers, suppliers, community, employees and other interest groups. Decisions made by managers are likely to affect different stakeholder groups’ benefits. For example, there are two oil companies called shell and BP which have businesses all over the world. They have a large number of stakeholders because of the nature of the business. Nowadays, Chemicals and oil products can affect people’s life in many ways. Therefore, these kinds of companies must work with its stakeholders in order to avoid conflict. Most companies have polices of working with stakeholders. Therefore, managers and directors should always be concerned about the stakeholders’ benefits.
Each stakeholder has various roles which would be examined from now on. Firstly, there are employees in the company. Managers should provide good working environment to employees. By putting its workforce before all other stakeholders the company is doing its best to ensure that they will have a motivated workforce. The workforce should be valued by the managers. If the managers offer better working environment, better pay and longer holidays, performance will be enhanced. For example, the Starbucks coffee shop which is one of the most respected coffee shops in the world has got a very good reputation of treating their employees well. They believe that employees are one of the most important resources of Starbucks. If the company aspires to prosper, the employees must be treated well. All employees are enabled to the Starbucks' health care and benefits package, as well as a starting wage above the minimum. Starbucks' strong commitment to the working environment is regularly supervised by an environment committee. With better working practices, performance will be improved as the efficiency increases. They believe that the welfare of employees and the quality of the products are closely linked.
Secondly, there are suppliers. Suppliers usually want to build up the long-run relationship with the firms. Firms should treat suppliers with respect and when they have a project or important business plan, suppliers should be involved in the decision making. According to one of the Marks & Spencer’s traditions, they have meetings with suppliers regularly and they carry out the number of surveys to enquire the supplier and franchisee satisfaction. In addition, they also attend major UK agricultural exhibitions to listen to farmers’ comments on their businesses. They try to develop a strong partnership with the suppliers. Firms and suppliers should always trust each other: suppliers have to deliver material on time and also companies have to pay on time. Therefore, firms can be supplied with what the business needs, and when it needs it. When the business organisation increases in size it will buy more goods from suppliers and borrow more which would be a benefit for the suppliers.
Thirdly, there are the customers. Customers, who are the people who spend money on goods, are the reason how firms can exist. According to Marks & Spencer, they always consider about customers preference and give sales information. They also monitor their customers view weekly and monthly and when they introduce new goods, they take a survey of customers view and expectation. Another example is Burger King which is the most well known food service retailer. When you go to Burger King, you can see the slogan which is attached on the employees’ t-shirt. It says ‘customers are king’. Managers and directors should sell a good product at a fair price. Firms should assure their customers to trust and believe their company and the products they produce so customers will be willing to purchase their products. Therefore, they will keep coming back. Otherwise they will lose customers and also profits. For example, as we have seen from the company of Sunny-Delight, first when they launched their products in the supermarkets, it was very successful. They used good marketing strategies such as displaying next to fruit drinks, advertising on TV etc... However, three years later they made deep mistakes which seriously damaged their sales of products. In fact, they cheated customers, Sunny-Delight put in 5% citrus juices, and a lot of sugar and water as much as Coke does. After that, sales of products decreased rapidly, they lost not only profit, but also a good reputation they had. Customers do not buy Sunny-Delight any more. The Company tried to recover this from happening but it never can go back again. This shows that a good reputation is important and once it is lost, it is hard to regain.
Finally, there is the local community. The communities expect the company to be responsible and respect the local area and environment. Company provide jobs in local places. When firms decide to build a company in some area especially chemical, oil and sweatshop it will be a conflict between the company and local community. Firms need to cooperate with the community which means that if the company set up a factory or if they want to expand their business, they could need permission from local community. Sometimes local community support the companies if firms want to expand or make other change. If firms build more stores, they will be required to build more car parking facilities, which will generate more traffic jam. Eventually this could create more pollution. If local community realised in advance which would be a bad effect in local area, they would report it to local people and to the company. Similarly, there is an example of sweatshop in Jakarta, the plant, owned by a Korean company, Dae Joo Corporation, made backpacks for Adidas, Jansport and other famous brands. However this factory shut down because of factory was accused by anti-sweatshop campaigners The Company forced overtime work and a dangerous working environment. Last year they invested by Workers Rights Consortium (WRC), which is monitors as a community. This community look after employees’ right. On the other hand, firms can also gain from better relations with the community like more favourable media coverage.
In conclusion, firms cannot completely ignore the environment they are in. If a firm only concentrates on their profit, they cannot even achieve the smallest things. Companies which only concentrate on profits are unlikely to have a good relationship with stakeholders which would lead to the company’s failure. They should cooperate with suppliers, employees, communities and customers. If they treat each others with trust and respect, satisfaction and benefits would be given to both, the company and also the stakeholders.
