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Most firms are affected by a number of factors such as customers, employers, suppliers, creditors and local community which are known as stakeholder groups.

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Some people believe that shareholders run the business and it works by itself. However, this is not true. Most firms are affected by a number of factors such as customers, employers, suppliers, creditors and local community which are known as stakeholder groups. Shareholders are interested in the way a company operates and performs. Shareholders are the people who own the company and share the profit. Managers and directors ought to work on behalf of shareholders. The main motivating factor of any company proprietor is simply to make money. Therefore the conflict could exist between the desire to make money and the provision of a service to the customers and other stakeholders. The issue is that whether manager's responsibility should be to shareholders alone or should they also regard the stakeholders' wants. Firstly, there is the shareholder concept. Shareholders employ managers and directors to run the company. As the owners of the company, shareholders usually have purposes to maximise their dividends and increase the value of their shares, which requires short term profits. If the company is wrong, shareholders can tackle with it by the AGM (annual general meeting). Company have to protect shareholders' investment, and it will effect to shareholders which keep their money in the business. Shareholders have massive of stock out of whole stock in the company. ...read more.


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. ...read more.


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. ...read more.

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