DEFINITION OF A STAKEHOLDER Essays - Ethics, Applied Ethics

DEFINITION OF A STAKEHOLDER Essays - Ethics, Applied Ethics DEFINITION OF A STAKEHOLDER Sparked by the labor movement, the concept of Corporate Social Responsibility (CSR) has only been in existence since the 1950's. Society began to expect companies to accept additional social responsibilities outside of the fundamental business functi ons, including being profitable. Starting in the 1960's and 1970's, the civil rights movement and environmental protection agencies influenced the way consumers looked at businesses. Consumers believed that those with great power also had great responsibility to positively influence people, the environment, and society. Businesses were called on to help solve global problems, aimed at making the world a cleaner, safer, and more productive place. This view was based on the concept that businesses should extend beyond their required economic and legal responsibilities to accept ethical, moral, and discretionary responsibilities in order to improve society. This view became the foundation for what we know in today's business world as Corporate Social Responsibility. In order to completely understand the context of Corporate Social Responsibility, you must first understand the role of stakeholders for an organization. The next section will describe the role of stakeholders. There are several definitions. The most common ones are: Those groups without whose support the or ganization would cease to exist. Any group or individual who can affect or is affected by the achievement o f the organization's objectives. T he individuals or groups that have an interest in the organization and are affected by its actions . Stakeholders can: a ffect a business , b e affected by a business , b e both affected by a business and affect a business . We can see from these definitions that a lot of people can be a stakeholder to an organisation . The most common groups who we consider to be stakeholders include: Managers Employees Customers Investors Shareholders Suppliers Board of directors Owners Government agencies Unions Political groups The media and others Then there are some more generic groups who are often included: Government Society at large The local community Within the broad spectrum of stakeholders, stakeholders can be broken into two different groups: primary stakeholders and secondary stakeholders. Primary stakeholders have a vested interest in how the organization performs and the actions it engages in to conduct business. Examples of these types of stakeholders are customers, employees, suppliers, board of directors, owners, and shareholders . Primary stakeholders directly affect the success and failure of the company. Secondary stakeholders can influence, both positively and negatively, the actions of the organization. They indirectly affect the organization by taking actions to make it difficult for the organization to succeed or by supporting the organization's efforts. Examples of secondary stakeholders are government agencies, regulation agencies, trade unions, labor unions, political groups, social groups, and the media . One of the primary functions of a business is to serve the needs of its stakeholders, also known as stakeholder responsibility. However, more and more businesses are taking this responsibility one step further by seeking out ways to address global issues to ultimately make the world a better place. These actions are referred to as Corporate Social Responsibility (CSR). Many people consider that only people can be stakeholders to an organisation . Some people extend this and say that the environment can be affected by organisational activity. These effects of the organisation's activities can take many forms, such as: the utilisation of natural resources as a part of its production processes the effects of competition between itself and other organisations in the same market the enrichment of a local community through the creation of employment opportunities transformation of the landscape due to raw material extraction or waste product storage the distribution of wealth created within the firm to the owners of that firm (via dividends) and the workers of that firm (through wages) and the effect of this upon the welfare of individuals pollution caused by increased volumes of traffic and in creased journey times because of those increased volumes of traffic Thus many people also consider that there is and additional stakeholder to an organisation , namely: t he environment . As we will see in the next chapter the actions of an organisation have a big effect upon future possibilities. It