23 Aug Discuss in detail the stakeholder approach. 1) 450 words original post
Discuss in detail the stakeholder approach.
1) 450 words original post
2) 2 Responses needed for other posts
3) APA Format
4) 3 References
Response#1( Shravan)
The stakeholder approach has its roots in horse racing. A stake race is one in which the prize money is derived from the entry fees that horse owners pay to enter the race. The entry fee is called a stake, a synonym for risk. The person or entity that takes care of the entry fees until the prize money is awarded is called the stakeholder. Traditionally, the stakeholder has no financial interest in the outcome of the race.
Stake races are still popular today, and over the years, the terms stake and stakeholder have been applied to many other types of speculation — including the stock market. In their 1983 article, “Stockholders and Stakeholders: A New Perspective on Corporate Governance,” R. Edward Freeman and David L. Reed proposed that in order for a business to succeed, it must create value for the owners (the stockholders), as well as for those people who do not have a direct financial interest in the company’s success, but without their help, the business could not exist (the stakeholders). The job of the entrepreneur is to find out who the stakeholders are and determine where their interests intersect with those of the stockholders. Company that ran 17 retirement villages had a dynamic, strategic relationship with current and potential residents. It wanted increased occupancy and more fees for services used. The company’s relationship with a university, by contrast, was static and operationally focused. It involved a fixed amount of research funding and co-branding each year. That’s all that was needed. Though the co-branding generated broader awareness and may have indirectly yielded more residents and revenue, the university itself didn’t achieve key stakeholder status.
Note that different types of medical referrers are grouped together. That’s because they all evaluate the medical practice with the same set of criteria: surgery success rate, range of treatment options, waiting time until the patient is treated, reputation among medical peers, proximity of practice to operating hospitals, and likely cost to the patient. But the third-party referrers, for instance, rely on different standards: accuracy of medical assessments, lead time before patient evaluation, amount charged for an expert opinion, professionalism of the practice, and compliance with report deadlines. And the patients look at quality of service (empathy, how clearly the options are explained, waiting time at reception), cost of medical service, payment terms, convenience of practice location to them, perceived surgical skill, and cleanliness and comfort of waiting rooms.
By clustering stakeholders according to common needs, you’ll whittle your list down to a more manageable length, increasing the efficiency and impact of your efforts to meet the right groups’ needs.
References:
1. Sisodia, R., Wolfe, D.B. and Sheth, J. (2007).Firms of endearment: How world-class companies profit from passion and purpose. Upper Saddle River, NJ, Wharton School Publishing.
2. Wicks, A.C., Gilbert, D.R. and Freeman, R. E. (1994). A feminist reinterpretation of the stakeholder concept. Business Ethics Quarterly 4 (4): 475-497.
Response#2(Rajeev)
Stake Holder Theory was first introduced by Edward Freeman in 1988. According to his theory he suggests that company success is mainly depends upon satisfying its stakeholders, and those on the people who might profit from its stock. The stakeholders play a very prominent role in the to support the organization and with those people there would be danger of shutting down the company. By, ignoring the stakeholders the organization can have the short-term profits but in the long run the organizations will face heavy loss if they lose the faith from the stakeholders. So, for any organization or the company stakeholders are the backbone for there success.
The stakeholder approach came into existence in the 19th century these approach helped the mangers of the organization to build a plan to overcome the changes and try to build a strategic plan which can help them to understand the necessary steps to adopt and to become successful and it had replaced the existed plans. The stakeholders are the group of people who can directly affect the success of the organization. It is simply defined as how the business work at its best and how it is supposed to functioned.
Stakeholder theory has been able to solve the conflicts like: –
Ø The problem of values relating to creation and trade
Ø The problems of Ethics in capitalism
Ø And to train the workers on how to behave in order to be successful in the present competitive world.
Stakeholder theory points out that people who own stock in a business are not only the people who are affected when or gain advantage due to the changes took place due to the decisions made because of the business. For, each business’s decisions will potentially affect the well-being of MANY more people than just the stockholders (for instance, businesses often regularly affect the well-being of their employees, their customers, and the community as a whole). So, each business’s obligations are to ALL those people.
Finally, to conclude business the final product is that every business would have a commitment to think about the interests of ALL partners, and moreover a commitment to Advance the interests of these partners. Lastly, the partners would reserve the option to make a move against the business if it neglects to satisfy these commitments
References
BRIDOUX, F., & STOELHORST, J. W. (2016). Stakeholder Relationships and Social Welfare: A Behavioral Theory of Contributions to Joint Value Creation. Academy of Management Review, 41(2), 229–251. https://doi.org/10.5465/amr.2013.0475
Lankoski, L., Smith, N. C., & Van Wassenhove, L. (2016). Stakeholder Judgments of Value. Business Ethics Quarterly, 26(2), 227–256. https://doi.org/10.1017/beq.2016.2
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