Stakeholder Theory

The Stakeholder Theory Charles Fontaine Antoine Haarman Stefan Schmid – December 2006 – Stakeholder Theory of the MNC Index 1. Introduction †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 3 2. Basic idea of the Stakeholder Theory and Definition †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 3 2. 1. 2. 2. 2. 3. 2. 4. 2. 5. The stakeholder concept – popular and trendy†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 4 Different definitions of Stakeholder †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 5 What is a Stakeholder? à ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 6 Who are Stakeholders? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 6 History of the Stakeholder Theory†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 7 3. Contribution of Freeman to the stakeholder literature †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 9 3. 1. 3. 2. Freeman Strategic Management †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Freeman’s essential book: A stakeholder approach †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 10 4. Normative, instrumental, and descriptive stakeholder theory†¦. 13 4. 1. Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 13 4. 2. Normative theory†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 14 4. 2. 1. Objective†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 4 4. 2. 2. The action of a company should be ‘ethic’†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 15 4. 2. 3. Freeman’s normative theory †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 15 4. 3. Analytic theory†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 17 4. 3. 1. Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 17 4. 3. 2. Strategic management: Freeman (1984) and Savage et Al. (1991)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 18 4. 3. 3. Stakeholder identification: Mitchell, Agle and Wood (1997)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 21 4. 3. 4. Friedman and Miles (2002)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 22 5. The stakeholders: from theory to practice†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 24 5. 1. 5. 2. 5. 3. 5. 4. The Corporate Social Responsibility theory †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 4 The three main current o f the CSR †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 26 The different CSR strategies †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 28 The Limits of the theory and its application †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 30 6. Conclusion †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 33 2 Stakeholder Theory of the MNC 1. Introduction In our work we want to explain the principle ideas of the stakeholder theory. The fact that the stakeholder concept has achieved widespread popularity among academics, media and managers we think that it is an important task to bring some system into all those confusing approaches around to the stakeholder concept. At the beginning we will comment on the basic idea of the stakeholder theory. We will also try to give a clear definition of what the concept is all about. Freeman who has contributed a lot to this approach will be the main guide line in our work. We will also give a brief overview of the history of the stakeholder concept and how it developed and why it became so popular lately. After that we will explain in a bit more detail the importance for organization attention to stakeholders. Further on we want to show how the stakeholder concept has been realized by companies. At the end of the paper we want to show the application and the limits of the stakeholder theory. In general the goal of our work is to give a better understanding of the stakeholder concept and make readers sensitive about how the stakeholder concept could change management practice. . Basic idea of the Stakeholder Theory and Definition The traditional definition of a stakeholder is â€Å"any group or individual who can affect or is affected by the achievement of the organization’s objectives† (Freeman 1984). The general idea of the Stakeholder concept is a redefinition of the organization. In general the concept is about what the organization sh ould be and how it should be conceptualized. Friedman (2006) states that the organization itself should be thought of as grouping of stakeholders and the purpose of the organization should be to manage their interests, needs and viewpoints. This stakeholder management is thought to be fulfilled by the managers of a firm. The managers should on the one hand manage the corporation for the benefit of its stakeholders in order to ensure their rights and the participation in decision making and on the other 3 Stakeholder Theory of the MNC hand the management must act as the stockholder’s agent to ensure the survival of the firm to safeguard the long term stakes of each group. The definition of a stakeholder, the purpose and the character of the organization and the role of managers are very unclear and contested in literature and has changed over the years. Even the â€Å"father of the stakeholder concept† changed his definition over the time. In one of his latest definitions Freeman (2004) defines stakeholders as â€Å"those groups who are vital to the survival and success of the corporation†. In one of his latest publications Freeman (2004) adds a new principle, which reflects a new trend in stakeholder theory. In this principle in his opinion the consideration of the perspective of the stakeholders themselves and their activities is also very important to be taken into the management of companies. He states â€Å"The principle of stakeholder recourse. Stakeholders may bring an action against the directors for failure to perform the required duty of care† (Freeman 2004). All the mentioned thoughts and principles of the stakeholder concept are known as normative stakeholder theory in literature. Normative Stakeholder theory contains theories of how managers or stakeholders should act and should view the purpose of organization, based on some ethical principle (Friedman 2006). Another approach to the stakeholder concept is the so called descriptive stakeholder theory. This theory is concerned with how managers and stakeholders actually behave and how they view their actions and roles. The instrumental stakeholder theory deals with how managers should act if they want to flavor and work for their own interests. In some literature the own interest is conceived as the interests of the organization, which is usually to maximize profit or to maximize shareholder value. This means if managers treat stakeholders in line with the stakeholder concept the organization will be more successful in the long run. Donaldson and Preston (1995) have made this three-way categorization of approaches to the stakeholder concept kind of famous. 2. 1. The stakeholder concept – popular and trendy In the past view years the concept of stakeholders has boomed a lot and academics wrote a lot about the topic. But also non-governmental organizations (NGOs), regulators, media, business and policymakers are thinking about the 4 Stakeholder Theory of the MNC concept and are trying to implement it in some way or the other. Most contributions are particularly about the normative principle. They promote the vision of the company and the role of managers whose objective is mainly to maximize shareholder value in order to be sustainable. However, this perspective seems to be giving way to that business has more and broader responsibilities. Those are best defined in terms of the stakeholder approach. Another reason why this topic is very popular and contested among theorists is that there is quit an amount of contesting literature around which is tried to be replaced and up dated. Along with the popularity has come a profusion of different overlapping approaches to the stakeholder concept. This has led to a confusing situation in this sector. In order to deal with this conceptual con fusion a number of classification schemes have been developed. The most famous literature contribution which makes the distinction between normative and strategic or analytical stakeholder theory was done by Donaldson and Preston in 1995. We will discuss this concept of stakeholders in more detail later on in our paper. 2. 2. Different definitions of Stakeholder As a consequence of the booming of the stakeholder concept and the literature written about the topic a lot of different definitions of stakeholder developed. The use of the stakeholder approach in big variety of context brings some criticism to the concept with it. Friedman (2006) mentions: That group of writers comes to coalesce around particular social constructions of reality, leading to writers referring to stakeholders without being aware of relevant theoretical issues that have been raised in other literatures. Roberts and Mahoney (2004) have examined 125 accounting studies that used the stakeholder language and found that nearly 65 percent â€Å"use the term stakeholder without reference to any version of stakeholder theory†. The important thing is that writers use the same label to refer to a lot different concepts. This of course can have great consequences on ethical, policy, and strategic conclusions. 5 Stakeholder Theory of the MNC 2. 3. What is a Stakeholder? In the book of Freeman (1984) the earliest definition is often credited to an internal memo report of the Stanford Research Institute (SRI) in 1963. They define them as â€Å"those groups without whose support the organization would cease to exist†. Freeman (2004) has continued to use this definition in a modified form: â€Å"those groups who are vital to the survival and success of the organization†. This definition is entirely organization orientated so the academic circles prefer the definition of Freeman (1984) where he defines stakeholders as â€Å"any group or individual who can affect or is affected by the achievement of the organization objectives†. About twenty of the 75 definitions share this definition. Friedman (2006) states that this definition is more balanced and much broader than the definition of the SRI. The phrase â€Å"can affect or is affected by† seems to include individuals of outside the firm and groups may consider themselves to be stakeholders of an organization, without the firm considering them to be such. A more detailed distinction and analysis of the different definitions would go far beyond the extent of this paper. 2. 4. Who are Stakeholders? A very common way of differentiating the different kinds of stakeholders is to consider groups of people who have classifiable relationships with the organization. Friedman (2006) means that there is a clear relationship between definitions of what stakeholders and identification of who are the stakeholders. The main groups of stakeholders are: †¢ †¢ †¢ †¢ †¢ Customers Employees Local communities Suppliers and distributors Shareholders In addition other groups and individuals are considered to be stakeholders in the literature of Friedman (2006): 6 Stakeholder Theory of the MNC †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ The media The public in general Business partners Future generations Past generations (founders of organizations) Academics Competitors NGOs or activists – considered individually, stakeholder representatives Stakeholder representatives such as trade unions or trade associations of suppliers or distributors Financiers other than stockholders (dept holders, bondholders, creditors) Competitors Government, regulators, policymakers †¢ †¢ Managers are treated differently in the literature. Some regard them as stakeholders others embody them in the organization’s actions and responsibilities. A very interesting view of managers came from Aoki (1984), who saw managers as referees between investors and employees. Of course all categories of stakeholder gr oups could be defined more finely. For example media could be split up into radio, television and print media, or employees as blue-collar and white collar workers, or in terms for which department they work. An advantage of finer categories of stakeholders is that by doing so more homogeneous grouping of people is more likely. The negative fact about this would be the greater chance of overlap of interests and actions. 2. 5. History of the Stakeholder Theory In the mid-1980 a stakeholder approach to strategy came up. One focal point in this movement was the publication of Richard Edward Freeman. He is generally credited with popularizing the stakeholder concept. The title of the work is – Strategic Management and only the subtitle is A Stakeholder Approach and came out in 1984. Stakeholder Theory of the MNC Doing this he indicated that his view of the stakeholder concept was done from the perspective of the company. He built on the process work of Ian Mitroff, Richard Mason and James Emshoff. Actually the use of the word stakeholder came from the pioneering work done at Stanford Research Institute (SRI) in the 1960s. They further were heavily influenced by several concepts that we re developed in the planning department of the Lockheed Company and these ideas were developed from the researching done by Igor Ansoff and Robert Steward. Ansoff was around 1960s working for the SRI in association with Lockheed (Friedman 2006). It is also clear that business leaders were thinking and expressing the stakeholder concept long before the early 1960s. Dodd (1932) states that already GEC was identifying four main groups which whom they had to deal with. Those four groups were defined as shareholders, employees, customers, and the general public. Further, Preston and Sapieca (1990) mentioned that Johnson & Johnson identified customers, employees, managers, and the general public in 1947. The company Sears named „four parties to any business in the order of their importanceâ€Å"as â€Å"customers, employees, community and stockholdersâ€Å"in the year 1950. Schilling (2000) that the start of thinking about the stakeholder concept was the work of Follet in 1918. Friedman (2006) considers â€Å"Here a concern about the corporation, which emerged along with the origins of the corporation as a legal entity which he, calls the soulless corporation†. This shows a moral or normative vacuum that has favored ideas of how this could or should be dealt with. In order so fill this vacuum the stakeholder concept has come up to handle this demand. By distinguishing in this work between pre- and postFreeman (1984) it should be easier to understand why the stakeholders approach has become so popular during the last twenty years. Generally important to know is that from the start on the stakeholder approach grew out of management practice. 8 Stakeholder Theory of the MNC 3. Contribution of Freeman to the stakeholder literature 3. 1. Freeman Strategic Management An argument for the more frequently used stakeholder concept in the early 1980s could be the changes among workers, students, consumer groups and environmentalists in the late 1960s. One possibility of arguing about the development of this field is to see the planning process as becoming increasingly sensitive to the business environment and the need for good information about it. Friedman (2006) has the opinion that at the time where the SRI came up with their memo they called for information systems to scan and track stakeholder responses to changes in corporate strategy as part of this environment. The SRI has developed â€Å"measures of satisfaction† for the stakeholder groups who they have found. Freeman (1984) noted that planners did not want to attempt to influence specific stakeholder behavior rather they wanted only to forecast the future environment in order to adapt it with the capabilities of the company. In the 1960s the environment was very stable, relatively static and kind of predictable. Freeman (1984) stated that prior to his work, the strategic planning literature did hardly consider stakeholders, and when, only very undefined, as generic groups, and only legitimate or friendly stakeholders. The groups like competitors or other rivals were left out. The literature of that time just developed simplistic approaches for considering the environment the stakeholders were ignored. Porter (1980) for example was one theorist who dealt with the environment and split it up into his SWOT analyses (strength, weakness, opportunities and threats). Friedman (2006) mentions an interesting exception. Ansoff who was a key contributor to the strategy literature from the 1960s to the 1970s and was part of the Lockheed-Stanford connection that produced the initial stakeholder definition. He defines objectives as â€Å"decision rules which enable management to guide and measure the firm’s performance towards its purpose† and responsibilities as â€Å"obligations which the firm undertakes to discharge â€Å"and not â€Å"part of the firm’s internal guidance and control mechanism† (Ansoff1965). Another interesting contribution he made is that the distinction of constraints which he defined as 9 Stakeholder Theory of the MNC â€Å"decision rules which exclude certain options from the corporations freedom action† such as certain rules or regulations enacted by the government. 3. 2. Freeman’s essential book: A stakeholder approach The main idea behind the book of Freeman’s book titled Strategic Management, A Stakeholder Approach, was to try to build a framework that was responsive to the concerns of managers who were being confronted with unprecedented levels of environmental turbulence and change. He argued (Freeman 1984): â€Å"Gone are the good old days of worrying only about taking products and services to market, and gone is the usefulness of management theories which concentrate on efficiency and effectiveness within this product-market framework†. Traditional strategy frameworks were not helping managers anymore to develop new strategic directions and also did not help creating new opportunities. Freeman (1984) said that current theories are inconsistent with both the quantity and kinds of change that are occurring in the business environment of the 1980’s. Turbulence organizations are facing the need for new management and a new conceptual framework was. And his approach was a response to this challenge. In Freeman’s (1984) opinion it was not enough to solve the calls for increased productivity using the methods from Japan or Europe. He believes that â€Å"business-labor-government cooperation† is only part of the solution. Both internal and external change has meant that the model of the organization as a mere resource-converter is no longer â€Å"valid† and suitable. Internal change includes owners, customers, employees and suppliers. External change for Freeman (1984) includes: The emergence of new groups, events and issues which cannot be readily understood within the framework of an existing model or theory†¦. It makes us uncomfortable because it cannot be readily assimilated into the relatively more comfortable relationships with suppliers, owners, customers and employees†¦. It originates n the murky area labeled â€Å"environment† and affects our ability to cope with internal changes. 10 Stakeholder Theory of the MNC Some examples for external change would have be the expansion of government activities, the increase in foreign competition, the 1960s environmentalist movement associated with the publication of Rachel Carson’s The Silent spring (1962) and the formation of the Environmental Protection Acts. the growth of groups concerned with special interests such as gun control or abortion, and also the media became more important in business. All those changes favored the need of a new model of the organization. Freeman (1984) made his view of the firm with the common hub-andspoke picture (see Figure 1). Managers are not mentioned because they work within the firm and so they are assumed to be within the hub. Important to know is that Freeman notes that the illustration of his diagram is very oversimplified and as already mentioned the groups shown can be broken down into more specific categories (see Section 2. . ). Freeman chose the word Stakeholder on the basis of the traditional term stockholder which takes only a look at the economic point of view. Where the stakeholders are defined as â€Å"any group of individual who is affected by or can affect the achievement of an organization’s objectives† (Freeman 1984). 11 Stakeholder Theory of the MNC Figure 1 : Stakeholder map of a MNC / Source: Freeman (1984) Owners Political Activists 12 Stakeholder Theory of the MNC The purpose of stakeholder management was to create methods to manage the different groups and relationships that resulted in a strategic fashion. Further Freeman (1984) thinks that the idea of stakeholders, or stakeholder management, or a stakeholder approach to strategic management, suggests that managers must formulate and implement processes which satisfy all and only those groups who have a stake in the business. The main task in this process is to manage and integrate the relationships and interests of shareholders, employees, customers, suppliers, communities and other groups in a way that guarantees the long-term success of the firm. A stakeholder approach is very much concerned about active management of the business environment, relationships and the promotion of shared interests in order to develop business strategies. But due to the fact that a lot of different stakeholder concepts are around in literature in order to get a better overview the next chapter will go in more detail in the contribution to the literature done by Donaldson and Preston (1995) who distinguish between normative and strategic or analytical stakeholder theory. 4. Normative, instrumental, and descriptive stakeholder theory 4. 1. Introduction Freeman’s work â€Å"Strategic Management: A stakeholder Approach† (1984) offers a managerial and practical scope and does not really constitute a theory. But it has constituted a base for the development of the stakeholder theory, witch have been widely developed since the 1980’s. Stakeholder concept gave rise to heterogenic theoretical developments witch have been summarized in Donaldson and Preston Article â€Å"The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications† (1995). They suggested that the stockholder theory literature can be seen as three branches: 13 Stakeholder Theory of the MNC – Descriptive: The aim is to understand how managers deal with Stakeholders and how they represent their interests. The corporation is viewed as a constellation of interests, some time competitive and some time cooperative. The analytic theory will show how the MNC can deal with these divergent interests of stakeholders. – Instrumental Approach: Study the organizational consequences of taking into account stakeholders in management examining the connections between the practice of stakeholder management and the achievement of various corporate governance goals. Normative: Identification of moral or philosophical guidelines linked to the activities or the management of corporations. Donaldson and Preston argue that if these three approaches are combined without acknowledgement it would result to confusion. First we will study the normative approaches of the stakeholder theory witch are considered by many as the core of the theory, then we wi ll study the Instrumental and descriptive theory (analytic), and we will finally try to find common concepts of the stakeholder theories. 4. 2. Normative theory 4. 2. . Objective The objective of the normative theory is to answer the following questions, â€Å"what are the responsibilities of the company in respect of stakeholders? † and â€Å"why companies should take care of other interests than shareholders interests? †. The normative theory is linked to moral, values and philosophic purposed. For Donaldson and Preston (1995) the normative theory is the core of the stakeholder theory. For them stakeholders have a legitimate interest in MNC's and their interests have 14 Stakeholder Theory of the MNC intrinsic value. But Freeman think that the idea of Donaldson and Preston suppose a separation between economics and ethics spheres. For Freeman every organization theory incorporates a moral dimension, even if it is most of the time implicit. For many authors relationships between the firm and stakeholders are based on moral commitments. Not only to optimize profit managing stakeholders relationships in an optimal way. The relations between firms and its stakeholder can be valuable for the company as a reflection of it values and principles. Each company should define fundamental moral principles, and use these principles as a basis for decision making. . 2. 2. The action of a company should be ‘ethic’ One pillar of the normative stakeholder theory is that the company decisions affect stakeholder outcomes and has to be ethic. In this kind of situation, when the action of an agent affects an other agent, the company has to build ethics principles. Decisions made without any consideration of their impact are usually thought to be unethical. Donaldson and Preston (1995) state that the stakeholder interests has an intrinsic worth not indirectly linked to the company interests. A firm should not ignore claims of stakeholders simply because honoring them does not serve its strategic interests. The firm should build principles or â€Å"rules of the game† on how the company should operate building contracts with stakeholders. 4. 2. 3. Freeman’s normative theory Evan and Freeman (1990) tried to build a normative theory based on this definition of stakeholders: â€Å"Those groups who are vital to the survival and success of the corporation†. It means customers, employees, suppliers, communities, shareholders and managers. Evan and Freeman call for a redefinition of the purposes of the firm to act as a vehicle for coordinating stakeholders interests. They propose two principles: 15 Stakeholder Theory of the MNC †¢ Principle of corporate legitimacy. The company should be managed for the benefit of its stakeholders. Stakeholders must participate in decisions that substantially affect their welfare. †¢ The stakeholder fiduciary principle. Managers must act in the interests of the stakeholders as their agent in the interests of the corporation to ensure the survival of the firm. Managers have the same duties than other employees but they also have a duty of safeguarding the welfare of the firm. For making stakeholder management practicable Evan and Freeman propose a stakeholder board of directors comprising representatives of the five stakeholder groups, plus a director witch would be elected unanimously by the others and be vested with the duty of caring for all stakeholders. One year later in ‘doctrine of fair contracts† Freeman develops how contracts can be made between the corporation and stakeholders. In the model stakeholder representatives are assumed to be rationally self interested and to understand the implications of different corporate designs for success or failure. In this condition parties should choose the six following rules (‘Doctrine of fair contracts’ Freeman 1994): †¢ The principle of entry and exit: The contract has to define process that clarify entry, exit and renegotiation conditions for stakeholders to decide when an agreement can be fulfilled †¢ The principle of governance: Procedures for changing the rules of the game must be agreed by unanimous consent. This would lead to stakeholder governing board. †¢ †¢ †¢ The principle of externalities: If contract between A and B involve C, C has to be invited as a party of the contract. The principle of contracting costs: Each parties must share in the cost of contracting The agency principle: Any party must serve the interests of all stakeholders 16 Stakeholder Theory of the MNC †¢ The principle of limited immortality: The corporation should be managed as if it can continue to serve the interests of stakeholders through time. These principles represent an ideal to guide actual stakeholders in devising a corporate constitution or charter. It permits to build strategy on ethics asking â€Å"what do a company stand for? † in conjunction with it strategy decisions. 4. . Analytic theory 4. 3. 1. Introduction Has we have seen in the introduction the analytic part of the stakeholder theory is composed of what Donaldson and Preston called the instrumental and the descriptive approach. The objective is to understand how managers deal with stakeholders, how they represent their interests and the impact of the stakeholder approach in the achievement of various cor porate goals. We are going to consider an organization centric view of the stakeholder theory witch mean that the firm is considered to be the nexus of the interests of each stakeholder. This is the vision of Freeman and his model has seen contributions of Savage (1991), Clarkson (1995), Jones (1995), and Mitchell, Agle, and Wood (1997). The analytic theory is necessary to answer the question: how to organize into hierarchy stakeholders influence? Each author has a different point of view and we are going to see each model, theory or contribution. Even if their theories converge in order to find a unique stakeholder theory, there are still differences and the authors have not found a consensus yet. 17 Stakeholder Theory of the MNC 4. 3. 2. Strategic management: Freeman (1984) and Savage et Al. (1991) Freeman gave two definitions of a stakeholder: †¢ †¢ â€Å"Group of people who can affect or can be affected by the achievement of the organization’s objectives† (1984) â€Å"Those groups who are vital to the survival of the organization† (2004) Belong to him, in order to enhance an organization’s stakeholder management it is necessary to begin by defining who the stakeholders of the corporation are. If we apply his definition, it means: â€Å"who are those groups who can affect or can be affected by the achievement of the organization’s purpose†? This mean mapping the stakeholders, providing detailed list of the specific groups and companies related to each category of stakeholders, and a corresponding list of interests. For Freeman the corporation occupies a central position and has direct connections to all Stakeholders (see Figure 1 pg. 11). Freeman suggests that each MNC should distinguish important stakeholders and negligible stakeholders. For him the MNC has to limit the number of stakeholders and to not take care of inoffensive stakeholders. To facilitate important stakeholder mapping Freeman suggests the following question: †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Who are our current and potential stakeholders? What are their interests/rights? How does each stakeholder affect us? How do we affect each stakeholder What assumption does our current strategy make about each important stakeholder? What are the â€Å"environmental variables† that affect us and our stakeholder? How do we measure each of these variables and their impact? How do we keep score with our stakeholders? 18 Stakeholder Theory of the MNC In order to find the optimal strategy for each group of stakeholder Freeman suggests analyzing the stakeholder behavior and possible coalitions between stakeholders groups. The stakeholder behavior can be delineated investigating in the past actions of such kind of groups. It is necessary to analyze the actual behavior of stakeholders, their cooperative potential and competitive threats. Coalition may develop if different groups of stakeholder have common interests or common issues linked to the activity of the MNC. They can then form a more powerful group witch has to be taken into account. For Freeman manager should scan the environment for instance of similar actions, interests, beliefs, or objectives between stakeholders groups. The formation of a coalition can change stakeholder strategy and positions on issues. These two analysis lead to a more realistic map of company’s stakeholders. It also allows the manager to construct a logical explanation to explain why specific stakeholders act in a particular way. The company has to determine the long terms objectives of each groups and consider the stakeholders as rational. This map of stakeholders allows finding the optimal strategy for each group. Freeman is going to consider two variables to determine the optimal strategy: the relative power of stakeholders and their potential to cooperate or threaten corporate strategy. Savage et Al. (1991) gave guidance on the measurement of these variables. The power of threat is determined by resource dependence, the stakeholder’s ability to form coalitions, and relevance of the threat to particular issue. The potential to cooperate is determined by the stakeholder’s capacity to expand its dependence with the organization: the greater is the dependence, the greater is the willingness to cooperate. As a result Savage et Al. distinguish four types if stakeholders: †¢ Supportive: high cooperative potential and low competitive threat. Considered as the ideal type and it includes the board of trustees, managers, employees, parent companies, suppliers, service providers and non-profit organizations. 19 Stakeholder Theory of the MNC †¢ Marginal: low cooperative potential and competitive threat. Includes consumers’ interest groups, professional association for employees and shareholders. †¢ †¢ Non-supportive: low cooperative potential and high competitive threat. Includes competitors, unions, media and government. Mixed Blessing: high cooperative potential and competitive threat. Includes client and organizations with complimentary products and services. Freeman distinguishes four main strategies depending of the type of stakeholders: †¢ Offensive strategy: Should be adopted when a group is supportive. It includes trying to change stakeholder objectives or perceptions, to adopt the stakeholder position or to link the program to others that the stakeholder views more favorably. †¢ Defensive strategy: Should be adopted when a group is Non supportive. The objective is to prevent competitive threat on the part of these stakeholders. It means reinforcing current beliefs about the firm, maintaining existing programs or letting the stakeholder drive the integration process. †¢ Swing strategy: Should be adopted when a group is Mixed blessing. The firm has to take decisions such as changing the rules, the decision forum, the transaction process†¦ †¢ Hold strategies: Should be adopted when a group is marginal. The company should hold its current position and continue current strategic program. Has we can see Freeman but also Savage et al. o a separation of stakeholders regarding the cooperative potential and the competitive threat. 20 Stakeholder Theory of the MNC Clarkson (1995) introduce a distinction between primary stakeholders and secondary stakeholders. Primary stakeholders as those â€Å"without whose continuing participation, the corporation cannot survive as a going concern,† suggesting that these relations hips are characterized by mutual interdependence. Secondary stakeholders are not vital for the MNC. Primary stakeholders are the partners of the firm whereas secondary stakeholders have voluntary relationships with the firm. 4. 3. 3. Stakeholder identification: Mitchell, Agle and Wood (1997) The major contribution for relationships between managers and stakeholders and the way to categorize them comes from Mitchell, Agle, and Wood (1997). They tried to find a model to explain logically why managers should consider certain classes of entities as stakeholders and how prioritize stakeholder relationships. They put forward three objective criterions in order to organize into hierarchy stakeholders of a company: the stakeholders power to influence the firm, the legitimacy of the stakeholders relationship with the firm and the urgency of the stakeholders claim of the firm. These three criterions can be combined and it lead to seven stakeholders types (see figure 2). There are three types of power: †¢ †¢ †¢ Coercive power: based on physical resources of force, violence, or restrain Utilitarian power: based on financial or material resources Normative power: based on symbolic resources such as being able to command attention of the media But it is not the only way to classify a stakeholder as a high priority. Legitimacy is required to provide authority. They use the Suchman’s definition of legitimacy: â€Å"a general perception that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs and definitions. â€Å" Urgency is based on time sensitivity, the degree to witch managerial delay in attending to the claim is unacceptable fro the stakeholder, or critically. Urgency 21 3 Stakeholder Theory of the MNC Stakeholder Type Latent: 1. Dormant 2. Discretionary 3. Demanding Expectant: 4. Dominant 5. Dangerous 6. Dependant Highly salient: 7. Definitive Figure 2: Model of stakeholder salience / Source: Mitchell, Agle, and Wood (1997) All attributes can be gain as well as lost. A stakeholder is a low priority if only one attribute is recognizes, he became a moderate priority if two attributes are held and a high priority if the three attributes are perceived. Possession of an attribute is subjective. Sometime a stakeholder may not be conscious of possessing an attribute, but at the end it is the manager who decides witch stakeholder has this or another characteristic. So manager could incorrectly perceive the field, and should ask the questions Freeman uses for mapping stakeholders. Furthermore this possession is also dynamic. For example for Nike, NGOs were only legitimate at the beginning, but became urgency with the media support and then powerful with the boycott appeal. 4. 3. 4. Friedman and Miles (2002) Friedman and Miles (2002) use two criterions to define firms stakeholder relationships. Their typology of organization-stakeholder relations is based on two distinctions: †¢ Compatible or incompatible in terms of sets of ideas and material interests 2 Stakeholder Theory of the MNC †¢ Necessary or contingent. Necessary relationships are internal to a social structure or to a set of logically connected ideas. Contingent relations are not integrally connected. As a result four relationships between MNC and stakeholders are distinguished. For each of them they encourage certain strategic actions. Necessary Type A Defensive Compatible Sh areholders Top management Partners Type D Compromise Trade unions Low-level employees Incompatible Government Customers Creditors Some NGOs Contingent Type B Opportunism The general public Companies connected through Common trade association Type E Competition/elimination Criminal Members of the public Some NGOs Type A: Necessary compatible relationships when all parties have something to win this connection. It is so logic to protect this relationship as a strategy. 23 Stakeholder Theory of the MNC Type B: contingent compatible institutional arrangements. The two parties have the same interest but there is no direct relationship between parties. An opportunistic strategy is the logical strategy. Type C: contingent incompatible institutional arrangements. The two parties have separate, opposite and unconnected set of idea or interests. It becomes a problem when one of two parties insists on its position. The strategy corresponds of defending its own interest by seeking to eliminate or by discrediting oppositional views. Type D: Necessary incompatible relations occur when material interests are necessarily related to each other, but their operations will lead to the relationship itself being threatened. The situational logic is concession and compromise. As we can see stakeholder theories, normative and analytic, are widely different between times and authors. . The stakeholders: from theory to practice. 5. 1. The Corporate Social Responsibility theory The way businesses involve the shareholders, employees, customers, suppliers, governments, non-governmental organizations, international organizations, and other stakeholders is usually a key feature of the Corporate Social Responsibility (CSR) concept. According to the Commission Green Paper (2001), the CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Amongst other things, this definition helps to emphasize that: †¢ An important aspect of CSR is how enterprises interact with their internal and external stakeholders (employees, customers, neighbors, non-governmental organizations, public authorities, etc. ); 24 Stakeholder Theory of the MNC †¢ †¢ CSR covers social and environmental issues, in spite of the English term corporate social responsibility; CSR is not or should not be separate from business strategy and operations: it is about integrating social and environmental concerns into business strategy and operations; CSR is a voluntary concept. The social responsibility is presented as the consideration of the expectations of the stakeholders and the fact, for the company, of â€Å"answering† to the consequences of its decisions to these stakeholders. At the pragmatic level, this approach is often summarized by the concept of â€Å"triple bottom line â€Å"(John Elkington) that is the consideration in the management of economic, environmental and social objectives. Companies are dependent on stakeholders to obtain the necessary resources for their survival and for their development. The legitimacy of the company to use these resources depends on the correspondence of its behavior to rules and values recognized by the society; it will obtain a â€Å"license to operate† on the condition of not being considered as a predator of the natural and social environment. It is about a utilitarian legitimacy. The employees, when they have the choice, will prefer to work in a socially responsible company. The consumers tell, in inquiries, to prefer goods produced in the respect for the fundamental rights of the work. Besides the financial performances, the investors integrate, in their choices of portfolios, the risk of loss of † reputation capital â€Å", which can also be translated by a loss of financial capital. Substantial or symbolic, the strategies of correspondence answer different constraints: †¢ The constraints imposed by the law and matched by penalties; we define the exercise of the social responsibility as to go beyond the only respect for the legal obligations. The motivation of certain companies to set up devices of social responsibility is often connected to the anticipation of a hardening of the legislation, especially in the environmental domain. 25 Stakeholder Theory of the MNC †¢ The professional environment generally promulgates the normative constraints; their adoption can be made on a voluntary base which values the commitment of the company. †¢ The mimetic constraints are going to lead certain companies to imitate the others, for example the † best practices † of some pro-actives leaders, and this, especially if the environment is uncertain and ambiguous. . 2. The three main current of the CSR Within the literature in management, the contemporary debate on the responsibility of companies took its origin in an article of Bowen1 supporting that companies should revisit their strategies by integrating the social and environmental dimensions to answer the various pressures of the society. Among the large number o f articles dedicated to the social responsibility of companies, notably in the United States, it is possible to distinguish three currents: the ethical moralist current â€Å"Business Ethics†, the â€Å"Business and Society† current and the â€Å"Social Issue Management†. The theories of the â€Å"Business Ethics† current assert the existence of a moral responsibility of companies towards the society and future generations and postulate that the company has, by nature, a statue of moral agent, able to distinguish the good and the evil, thus having the moral duty to act in a social responsible way. In spite of its gaps, this approach generated an important movement around † the ethics of the business† and a speech which often confuses † the good and the useful â€Å", ant that is why we can find a multiplication of â€Å"ethical† charters, of â€Å"ethical† investments which are only taking advantage of the â€Å"ethics† in economic purposes. The â€Å"Business and Society† current consider that there is no waterproof partition between the company and the society: Both are in interrelation and form themselves mutually by means of their constant interactions. The company maintains, with the society, relations which are not exclusively trade and it results 26 Stakeholder Theory of the MNC from it a shape of social contract authorizing a social control by the society and the possibility to â€Å"punish† a company â€Å"disobedient†. So, the authors of this current assert that the contracts of cooperation, which establish the confidence between the firm and its stakeholders, get a competitive advantage to the company. The â€Å"Social Issue Management† current proposes tools to the administrators to improve the performance of their companies, by taking into account the expectations expressed by various actors of the society; it restores the complexity of the management by widening the field of the actors and by taking away the horizon of the decisions; the expectations of the stakeholders are integrated into the strategic methods. In fact, these currents are not set and even cross together. They share the idea that what is good for the company is also good for the society. Archie B. Carroll, one of the authors the most known for the â€Å"Business and Society â€Å"current, elaborated a model which makes reference in the Anglo-Saxon world and which presents a four level pyramid. 27 Stakeholder Theory of the MNC Each of these levels depends on those which precedes it, the satisfaction of both first one (Economic and legal responsibilities) is requested by the society, that of the third one (ethical responsibility) is expected, that of the fourth one (philanthropic responsibility) is wished. These levels, crossed with the various groups of stakeholders, can serve as reference to define the various categories of social and environmental performance that have to be estimated (D. J. Wood, 1991). 5. 3. The different CSR strategies The integration of the stakeholders’ expectations in the strategies can take several forms: †¢ Actions of patronage or sponsoring, creation of foundations: in that case, there is a separation of the social and environmental actions and the economical actions; they are used as communications strategies. However in some cases, 28 Stakeholder Theory of the MNC he implication of the employees in these actions modifies the economic functioning of the organization. †¢ Actions integrated into the strategy, which try to implement the social and environmental dimension in the economic decisions: investments, conception of products or process of production. This method, often linked to the quality method, has for objective to decrease the ri sks and to improve the economic medium-term performances. In order to put into practice, to develop and to evaluate the actions of social responsibility, the stakeholders (and the company itself) have means, which are the â€Å"piloting devices†. Among them we can quote the external reporting and the internal devices of performances measures. But, the media reports certain examples of paradoxes. A â€Å"paradox† occurs when on a side, a company begins in an action of CSR, pledges for example concerning the durable development while other side, accusing and detailed revelations about its practices emergent at the great day. Certain ONG as Christian Aid clearly denounced abuses on behalf of certain great multinationals in certain parts of the world. For example in the United States, McDonald illustrates a CSR with double face. Emblematic company, which always wished to affirm its economic and social (even environmental) engagements, this company was criticized for non-ethical practices of businesses. At the time of the treatment of the McLibel case by British justice, this one confirmed certain complaints for ill treatment of the workers, abusive publicity and cruel treatment of the animals. February 15, 2005, the European Court of the Humans Right sliced in favor of Helen Steel and Dave Morris, (two ecologists militants) in their fight with McDonald' S in the McLibel case. The lawyer of the duet declared: † the European Court of the Humans right considered that violations of the humans right had been made in their opposition – that there had been a procedural inequity in the business and that the adopted procedures were not equitable† 29 Stakeholder Theory of the MNC In the same way, a European company as Shell largely took part as a proactive pioneer of the CSR but while missing however in 2004 to report to its shareholders a reliable evaluation of its oil stocks which melted its book value. The engagement of the company in CSR obliges it to be more transparent in the social contract than it with the other actors. It creates its own Damocles sword; other authors mentioned a â€Å"mortal risk† by the mediatization of its actions (J-Y Trochon, 2003). Failing to honor this engagement, the company takes a media risk of reputation even of confidence by a â€Å"boomerang† effect. This risk will come in the event of abuse early or late to remember with force to the good memory of all those which would wish to handle the other stakeholders and the shareholders initially. The risk result in a legal sanction, or even, in a faster and frightening stock exchange sanction and destroy in fine the dearly and patiently acquired reputation (media sanction). Enron and Parmalat are two emblematic examples, which show in the only sector of the corporate governance, on the two sides of the Atlantic, the fatal outcome of attempts of manipulation. 5. 4. The Limits of the theory and its application Milton Friedman wrote â€Å"The Social Responsibility of Business is to Increase Profits†. Friedman explains that corporations do not exist in physical reality, that only people can have responsibilities, and that businesses have no responsibilities as such. He maintains that there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game. To earn profit is the purpose of the corporation that should engage in open and free competition without deception or fraud (Edward W. Younkins, 2006). In this view, it seems that the question of a Corporate Social Responsibility has no sense. Furthermore, The Freeman stakeholder definition seems to be too large and therefore its implementation is impossible. Indeed the managers have time-limited 30 Stakeholder Theory of the MNC resources and have to select the stakeholders which are going to hold attention. The factors that explain this choice are the power, the legitimacy and the urgency (as seen in section 4. 3. 3): †¢ The power is held by groups of actors who have the capacity to influence the current or future decisions of the firm (cf. Jeffrey Pfeffer, Gerald Salancik, 1978). †¢ The egitimacy of a group corresponds to its recognition by the society by virtue of a contract, of a moral right or of a supported risk because of the activity of the company. Certain groups are legitimate but have no power (minority shareholders, the local residents of a polluting site not organized in defense association). †¢ The urgency characterizes the stakeholders that are asking for an immediate attention. This urgency i s a function of the time sensibility and defines the delay of reaction of the manager acceptable or not by the stakeholders. It corresponds to a critic situation in general, notably in case of exposition at the risk. The rationality of the leaders is necessarily limited by the urgency of the problems, by the pressures and by the information systems that they have. It seems therefore an illusion to envisage an exhaustive consideration of all the potential stakeholders. The influence of the stakeholders thus depends on the perception of the leaders and the hierarchy that they establish between the various expectations, notably when these are contradictory. They are thus going to choose and to â€Å"enact† the actors who will count for the definition of their strategy. The stakeholders’ theory remains ambiguous concerning its foundations and presents certain number of limits. On one hand, it joins in a relational representation of the organization based on complete contracts, which suppose that the conflicts of interests can be solved by insuring a maximization of each group interests. 31 Stakeholder Theory of the MNC On the other hand, the stakeholders’ theory builds a reduced representation of the social and environmental responsibility of the company. What about the â€Å"dumb† stakeholders (fauna, flora), about the third absentees (future generations, potential victims)? What about the values or interests of the too weak parties for being represented? Can we reduce the general interest to the sum of each group of stakeholder interests? Companies are trading organizations and the leaders are in front of dilemmas that can only be solved according to their more or less long-term profitability objectives. The issues depend then strongly on the dynamics relations between the firm nd its stakeholder, and of the level of the expectations and the pressures of the various actors. In the calculation of the advantages and the underlying costs in the â€Å"win-win† strategies, the anticipation of the behavior and the power of the stakeholders and the authorities of regulation is determining for the adoption of a socially responsible strategy. The actual consideration of social and environmental objectives in the strategies of c ompanies depends largely on the representations which have the actors of the society of their direct or indirect power on companies. The economic logic thus remains the main axis, structuring the decisions of companies. The expectations of the stakeholders, their pressures, are the constraints which are integrated into the strategic management according to the representation of the power of these stakeholders. As argue Jean-Luc Migue, the practice of the social responsibility leads to a paradox: the social responsibility implies the replacement of a managerial decision to that of the shareholders owners. As everywhere where the rights of property are eased, for example in the public sector, the individual irresponsibility follows. The practice of the social responsibility can lead to an individual irresponsibility. On the economic level, the generalization of this practice would lead to the end of the long-term economic growth and would make thus impossible the realization of the social ends looked for by the protagonists of the social responsibility. It is necessary in this subject to return to the essential education of the 32 Stakeholder Theory of the MNC economic theory, to the market as a mechanism of penalties and rewards and in the role of the instigations on the behavior. The theory and the history demonstrate that in its research for the maximum profit for its shareholders, the company realizes „the common good † in sub-product, and especially, that the ambition of † do-gooders † to divert it from its appropriate end that is the profit produces the exactly opposite effect that the one we suppose. 6. Conclusion The Stakeholder Theory is a quite new theory in the way it introduces the concept of stakeholders in the strategic management of a Multinational Company. The purpose of the MNC is not anymore only to make profit for shareholders but also to defend an image and values respecting all stakeholders. There is of course a link between the wealth of Shareholders and the wealth of all Stakeholders because the MNC need a good reputation to sell its products and so to make profits. But it has still not been clearly proven by empirical studies. The Stakeholder Theory is very popular in our times because people, and so on stakeholders, are worried about the sustainability of the actual economic system. With globalization, companies take more and more importance and are in many cases more powerful than states. In these conditions, their action can have a huge impact on the society in general, and people ask such companies to have â€Å"ethic† and values. With deregulation, and less power of state in favour of economy, companies should not only enjoy the rights of this deregulation but also duties. And that is what stakeholders (and in particular consumers) are asking for. Examples of Shell or Nike show that an irresponsible way of management, with low ethic or values, lead to a decreasing wealth of the first stakeholder of an MNC, its owner, shareholders. One of the main problems of the stakeholder theory is: stakeholder theories! One of the major contribution in Stakeholder theory is Freeman book â€Å"Strategic Management: A Stakeholder Approach† (1984) and it is often seen as the fundament of the Stakeholder theory. Then many Economists or Sociologists have made their contribution but not always sharing Freeman concept of Stakeholders. As a signs of 33 Stakeholder Theory of the MNC these divergences we have shown that there is more than 75 definitions of Stakeholders, witch is of course the key point of the theory. This is mainly due to the fact that Stakeholder Theory is not only an economic theory, having a huge part of philosophic or sociologic concepts. But in spite of these discussions it seems possible to identify some propositions on witch every author agree: The firm has stakeholders witch have requests, every stakeholders do not have the same influence, MNC prosperity depends of the ability of the companies to manage strategic stakeholders and the principal function of managing stakeholder is to take into account and to arbitrate stakeholders requests even when there are contradictory. In practice, contributions of these different theories at the governance level establish a new base to redefine the stakes of the company and its model of governance, analyzing them with regard to the expectations and to the interests of stakeholders. It is what led to us to analyze in our third part the concept of CSR. In the sights of what we explained, it seems that the application of the CSR can only come true, in general in the social and environmental sides, under reserve that this application does not prevent from financial profits (as the CSR slogan says: † doing well by doing good â€Å"). However we can notice the attitude of companies trying to take into account, in an increasing way, this â€Å"new† approach of governance, and this, facing to more and more strong pressures coming from the different stakeholders. Furthermore, companies are more and more urged to position themselves in front of the emergence of the â€Å"sustainable development† concept, and making it, the CSR seems to be an effective instrument for the integration of this concept by companies in their strategic orientation. 34 Stakeholder Theory of the MNC References Aggeri Frank, Acquier Aurelien, (2005). La Theories des Stakeholders pemet-elle de render compte des pratiques en matiere de RSE†, XIV Conference Internationale de Management Strategique, Anger 2005 Ansoff, H. I. (1965). Corporate Strategy. New York: McGraw-Hill. Aoki, M. (1984). The Co-operative Game Theory of the Firm. Oxford: Clarendon Press. Caron Michel, Quairel-Lanoizelee Francoise (2004). Mythes et realites de l’entreprise responsable. Clarkson, M. B. E, (1995). â€Å"A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance†, Academy of Management Journal,

Ema Essay

The main reason for this is the radical changes put in place so rapidly with immediate effect. This resulted in lack of structure and consistency throughout the whole chain stores, as you gave each store manager to much autonomy to change the store i. e. decor, food menu etc. , the business culture values as a whole was lost and that was what made the business a success before. I understand some changes had to be made but not so drastically. The loss of business culture and lack of dimension of structure had a lot negative effect in the business especially demographic and sociology factor wise as regular customers dislike the changes and constant change in staff router, the reason for this was staff/managers never has any incentive target to work towards so they would leave after short while which causes extra expenditure cost. Some good ideas drawn from the case study but presented in a quite unstructured way Part b) In Study session 1 we introduced a series a metaphors to describe a business one of them was business as a culture which is a pattern of belief and expectation shared by the organisational members. These beliefs and expectation produces norms that powerfully shape the behaviour of individual and groups within the organisation. As you recruited new staff with no experience and gave managers freedom to change each branch to their liking it took away the business identity and culture. The cause of this is inadequate training giving to new staff and lack of knowing the root/history of the business. A good example is how Disney world recruit and trains their staff, after passing the first phase the second is enrolling at university of Disney land where they undergo forty-hour apprenticeship programme, employee learn about the history and philosophy of Disneyland, and the regulation and procedures that govern work. The way Disney recruits is essential to keep hold of the business ethics and culture. OK but make sure the TMA maintains focus on the set question. Another example by Drennan (1992), who proposed 12 key factor that shape the culture of the business some of these are: The influence of a dominant leader-the vision, management style and personality of the founder or leader in a business often has a significant influence on the value that the business tries to promote The history of the business – how things has always been done The customers of the business who are they and what they expect The reward system and the measurement of performance c) These factor (above) could be useful to you to address your business problems vague and general in the future if put in place other suggestions are: Practices: These are the rites, ritual and ceremonies of the business. These can take many forms, and would include the annual office party, employees and inner site completion (what does this mean? ). (as mentioned before) Physical form: these include location, open plan or individual plan or individual office. Not relevant in a restaurant. Communication: Stories of notable events in the past tend to become part of the culture of the business and can influence behaviour explain how this relates to the case. A common language: jargon is common to many business. It is a convenient short hand form of communication, but is also effect behaviour. Disney employees are â€Å"cast crew† while McDonalds employee are â€Å"crew Members†. You have to be careful to hold on to the facts of the case, and not to go off at a tangent. Part 2 One of topics I found interesting through reading and taking part in discussion (book1 TMA01 Activity 1. 3) through TGF, which was the concept of business culture & whether a business culture can be changed. At first I thought how a culture integrates in a business metaphorically and the more I read and researched the more I understood the big role it plays in a successful business. Many cultural element of a business is not obvious, but there has been attempts in the academic literature to develop definition and identify influencing factors. It is possible to see, or feel, that one business is different from another, and that this involves more than just how it present itself to the outside world.. During our discussion on whether a business culture can be changed, I felt that as human we have to adapt to new cultures to understand each other so for a business is imperative for changes to be put in place to modernise the business culture where needed to evolve the business. Some key factors influencing culture are: Which industry or sector he business is in, and how much and what type of competition it faces The procedures and policies within the business – ever-evolving, but often a good indicator of underlying values. The reward system and the measurement of performance Good summary Where is your references list? Where is your word count? MARKING GRID Part I Maximum Marks Your Marks Question 1 (a) Identify the problems faced by Lodge Bistro that relate to the study session chosen Explicit identification of the study session chosen20 List of problems106 Why these are problems and how these affect Lodge Bistro1814 Total marks Q1(a)30 20

Manager Leadship Styles Essay Example | Topics and Well Written Essays - 500 words

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Classical leadership Essay Example | Topics and Well Written Essays - 1250 words

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Patagonia Case Study Example | Topics and Well Written Essays - 750 words

Patagonia - Case Study Example The CEO asserted that "the most important part of the mission statement was to provide and implement solutions to the environmental crisis." The assertion was important since the business relied on the environment. It was, therefore, not only a show of social responsibility but also to ensure sustainability of the business itself. It was also a show that the business was giving back to the community through a more comprehensive focus.It emphasizes quality through ensuring that the core users have products that are functional, simple and multifunctional. For example, it developed a ski jacket that could be used during boat sailing and winter rainstorms. The models were also improved to ensure that the products have distinct functions and are more reliable. For example, the products went through a field- test to determine its functionality, performance, fabric, performance and design before being released on the market. On environmental impacts, it was committed to ensure its products have least environmental impacts possible. For example, it ensured that the dye used for its products was a less negative impact on the environment, and the packaging was also reduced. It also engaged in the production of its organic cotton to prevent the conventionally grown cotton environmental impacts. On innovation, it invested $3 million each year to promote development and research.It ensured that its suppliers meet its standards of environmental and social responsibility and quality.

The social determinants of healthcare delivery service Essay

The social determinants of healthcare delivery service - Essay Example Social determinants of health can be regulated to improve the health conditions of countries. Through the adequate distribution of resources, the government can ensure that people have awareness about their health and have access to health care whenever they require it. Effective management and distribution of health care resources not only entails the treatment of a disease, but also its prevention. Preventing the occurrence of a disease can save a lot of resources not only financially, but also in terms of the staff, hospital resources and time that are spent on treating it. Obesity is becoming a serious health condition in the US and is starting to be referred to as an epidemic (Mechanic 112). Obesity is a global problem and more than 1.6 billion people all over the world are overweight. Of these figures, 300 million people are considered to be clinically obese, with a large proportion of overweight and obese people living in developed countries (Oxford Business Group 187). The obesity epidemic is at its very worst in the in the US (Plunkett). In the US, one person dies due to a health condition associated with obesity (Ayres). The US government spends $2 trillion annually on healthcare; about 76% of this sum is spent on the treatment and management of chronic diseases like diabetes, cancer, cardiovascular diseases and strokes. All of these diseases are linked to obesity. In an article published by Why, an organization working for the elimination of hunger and poverty in the US, it was reported that two-thirds of the Americans are overweight, and one-third are obese (Ayres). The annual health care costs of obesity have doubled in the past ten years in the country. A recen t research conducted by the government documented that the costs of obesity are as much as $147 billion a year (Ayres). Moreover, it has been reported that the number of obese children have increased very rapidly and this has had profound impacts on their health. In fact, according

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Case Summary and Analysis - Essay Example Cannondale is a bicycle manufacturing company that supplies bicycles in 66 countries. The company has to manufacture numerous and varying models of bicycles ordered by their clients. The company environment is characterized by demand for numerous varying bicycle models that requires different parts. Therefore, the company has to make several orders, which are hard to track and monitor. This created the difficulty in overall performance of the company. The main challenge is the need to manage the numerous bills of materials (BOMs) required manufacturing the different models. Being an international company, the company is faced by complex demands due to the varying needs of the customers. The complexity of the clients’ needs made it difficult for Cannondale to deliver customized products to their customers resulting in customer dissatisfaction. Additionally, the company could not monitor its sales effectively (Rainer and Cegielski 378-379). The rapid response system enabled Cannondale to manage its demand and supply chain effectively. The ease in management was because the RapidSystem made it easy and fast for the company to track the demands from their customers and monitor their supplies. The RapidSystem processes the supply and demand data in an easy to interpret manner making it easy for the customer to manufacture bicycles that meet the demands of their customer in good time. The buyers would easily make orders. Additionally the managers and other planners would easily monitor the daily inventories and make appropriate schedules for production purposes. Financial reporting became easy since the financial managers would easily monitor the sales using the systems. Another impact of the RapidResponse was easing interactions between the different participants in the supply chain. It has made it possible for the participants to instant simulate and share other information crucial in enhancing the supplies. This is cruc ial in enabling the company and the

Annonated Bibliography Essay Example | Topics and Well Written Essays - 1750 words

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Writing about Setting Essay Example | Topics and Well Written Essays - 1000 words

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World War II in American Scenario Essay Example | Topics and Well Written Essays - 1000 words

World War II in American Scenario - Essay Example Before the war, the American women primarily played the role of as housewives and mothers to the children. However, that changed after the initiation of the World War II, as the women folk were encouraged to join the industries and importantly even in the war efforts. This was pointed out by Quintile who states â€Å"The American Propaganda of 1941-1945 was aimed at persuading American Women to become involved in supporting the war effort, encouraging them to fill roles previously filled by men.† Thus various propaganda and continual appeals were issued from the American Government throughout the war to trigger the patriotic feeling among the women and to get their attention. Most of the propaganda aimed at the women during the World War II was three fold and that included the following. Firstly, they were done to fill the vacancies in the production area, which was caused by the departure of men from the workforce into the armed forces. Secondly, the other main aim of the pro paganda includes involving the women folk in the armed forces to fill up the desk activities and other roles such as the medical practitioners, nurses, civilians, chaplains, etc. Lastly actively support the armed forces by joining the troops in combative environments. Thus the government mainly focused on coming up with various approaches to make the American women contribute to the nation in a variety of ways. In that direction, the armed forces launched crash recruiting programmes such as conducting rallies, advertising campaigns, and other community outreach programmes to invite the female youth and women in other age groups. The War department publicists also produced huge posters that portrayed women in uniforms so as to make them involved in the armed forces. They particularly used the movie, ‘the Rosie the Riveter’, which depicted the life story of a woman who worked in the plane factory during World War II, as a publicity campaign to enroll more women into the a rmy. Even before the war, men were considered as the breadwinners who need to work outside the homes, while the women’s role was ‘contained’ within the confines of the house. The scene changed completely with the commencement of the Second World War. With respect to the increase in the demand of the military needs, the government decided to utilize the women folk in noncombatant and auxiliary military forces. As said above, women took over the traditional women’s work such as secretarial duties and other desk work inside the military operations. In 1942, US government â€Å"instituted the Women's Auxiliary Army Corps, later upgraded to the Women's Army Corps, which had full military status† and the female members of it, â€Å"known as WACs, worked in more than 200 non-combatant jobs stateside and in every theater of the war.† (â€Å"American Women in World War II.†). Then, women were efficiently used in support functions such as nurses , physicians, etc. The nurses from these groups sprang to the war front and they attended to the wounded soldiers. Also some of the nurses became Red Cross nurses and some served in the military nursing units. Moreover the cadet nurse crops recruited nursing students to work in military and other critical care facilities while they were in school. The cadet nurses and the medical practitioners joined the army to render critical nursing services to the wounded soldiers. They visited many military camps and attended to the needs of the soldiers apart from supplying with critical care medicines and other medical accessories to the camp. . Apart from non-combative roles, women also played active roles in the armed force

How a project different from operations work Essay Example for Free

How a project different from operations work Essay A project is very different from an operation work. In fact, projects and operations comprise the only two aspects of work existing in any organization. Of course, depending on the size and the needs of the organization, projects may or may not be part of existing programs or portfolios- both of them can be broken into several projects (PMI, 2013). Projects and operations are different in various ways. Here I list some of them in contrast: initiation, duration, operation process and budget. 1. Initiation. Projects are initiated by organizations for a variety of reasons, such as to meet a business need, attain a strategic objective or meet a market demand. Projects are created under specific needs. While operations work are to make sure the organization run smoothly, effectively, and professionally. Operations consist of all the activities that contribute directly to an organizations main areas of work (Wetfeet, 2012). Consider a clothing manufactory, which manufactures and sells clothing in its own stores. Operations would include everything from the manufacturing of clothing, to the shipment of that clothing to its retail stores, to the systems the company uses to track clothing thats sold at regular prices, at sale prices, returned by the customer, and so on. It would also include the fulfillment of orders placed on the companys website, and the customer service staff that helps customers with problems, complaints, or other issues. However, if the company has decided to produce a series of special clothing for this year’s Christmas, which will be sold only during the Christmas season, this initiative has become a project. 2. Duration. Projects are temporary in nature with a definite start and end. A project will end when it reaches its goal, or is terminated for various reasons (eg. the organization has changed the goal of the project, or the goal is not achievable†¦etc.), while operations start and end with the establishment and the closing of the company. It is also notable that a project can last for years or months and the effect and impact can last even longer far beyond the end of the project. 3. Operation process. Each project is aimed to create a unique outcome- a product, service or result. The operation process might be very different from one project to another, and the expertise involved can also be very distinctive. For instance, the operation process of a construction project is very different from an agriculture project, and the specific knowledge required will also be different.

Sexual Harrasment Essay Example for Free

Sexual Harrasment Essay He is trying to make her feel if she doesn’t continue the relationship with him it will cause a big problem and will spoil her name in society. He is forcing her to continue the relationship only with him. Linda offers sexual favors to her professor in order to get a passing grade. The professor agrees, and Linda receives a passing grade. Even though Linda offers sexual favors without professor compulsion, this is also a Sexual Harassment. Because, the professor is making use of Linda’s need to get passing grade. It clearly shows that Linda will get only passing grade if she does the sexual favor. A demand or request for sexual favor to do anything is clearly a sexual harassment. Mary, a supervisor, asks her male employee, Stan, to join her for dinner so they have will some quiet time away from the office to go over his performance evaluation. We are not clear about the intention of Mary here. If Mary really asks Stan to join her for dinner to discuss his performance evaluation it is good. Even if she discuss about performance, if she force Stan to join her for dinner it is harassment. It seems like, if Stan joins her for dinner, then only she is willing to go over his performance evaluation. Bob, a supervisor, makes comments about on a regular basis to his secretary, Susan, about how she is dressed for the day. Comments about clothing, personal behavior, or a person’s body are also one form of Sexual harassment. Bob’s comments on Susan’s dress for the day are Verbal Sexual Harassment. A customer in a restaurant grabs the rear end of a waitress. She complains about the customer to the manager, who says, â€Å"Ignore it, you’ll probably get bigger tip. Manager asking his waitress to ignore it for bigger tip is clearly the sexual harassment. Because, Manager is not willing to lose his customer on behalf of this and he is also encouraging these things to happen. Don posts pictures of scantily clothed women on his office walls. This is a more pervasive form of sexual harassment involving work conditions or behavior that make the work enviro nment hostile for the woman to be in. Display of pornography or sexist/obscene graffiti is an example of a hostile work environment. This is also one of the forms of Sexual Harassment.

The First Crusade In Medieval Times History Essay

The First Crusade In Medieval Times History Essay The crusades had a large affect on the medieval lives of Christians, Muslims and every other person who lived in Europe in that time. The first one, the one that started the rest was to believe to be in the 1096. The dates of the early ages vary among each source. The crusades were a Christian force, army that was created to re-capture the holy city of Jerusalem. The city at the time was controlled by the Muslims, who thought of it as their holy city as well. Did the first Crusade impact the human society to such a large extent that it changed the future in a bad way? The Crusade brought forth a loose of faith in religion trough out Europe that resulted in separation in the European countries that once stud under that rule of their god. The wars also increased the dislike between the Christians and the Muslims which increased the hate and racism, which is still affecting us today. The church had many supporters, including kings and queens. When the church went to war the Kings went with their armies, but the First Crusade was one of the only successful ones, so the pope then decided that he would be in control of the tactics of the next crusade. When the Muslims gained control of Jerusalem, before 1095, the Christians thought it was it was important to get the holy city back through a holy war. Both religions thought that they were fighting for the right side, their own religion, and that the other side was out of place. The complete knowledge of the Crusades has been lost over time, the dates and the stories have been told differently several times. Meany sites and books clam different thing about the crusades, different theories and different sides of the historic time. The historians in the west and the Muslim historians do not give credit to the Islamic interpretation of the Crusades. Modern scholars exhibit an ambivalent attitude towards the Islamic sources for the crusades (Paul E. Chevedden 187). The most accepted theory is something called the Big Bang theory. This theory talks about how pope Urban II made a mass movement when he made an appeal as Clermont in 1095 (Paul E. Chevedden 183). Christians, hasten to help your brothers in the East, for they are being attacked. Arm for the rescue of Jerusalem under your captain Christ. Wear his cross and your badge. If you are killed your sins will be pardoned. Pope Urban, 1095, http://www.historylearningsite.co.uk/cru1.htm?ref=Guzels.TV. The crusading brought forth violence and the Muslims found themselves the objective of an invasion from the west. The people who support this theory find themselves unwilling to tell of the development of the crusades and they simply say Major premise: The crusades began in 1095, because that is the date agreed upon by scholarly authorities. Minor premise: The earliest evidence for crusading dates from the year 1095. Ergo: The crusading enterprise as a political force and as a set of ideas and institutions (e.g. the ecclesiastical apparatus of indulgence, vow and cross) emerged in 10895. Paul E. Chevedden 183. Many scholars have found that the Minor premise might be wrong but people still continuo to follow it. The supporters of the Big Bang theory still need to present proof of their work. The Christians thought that they were fighting gods war. Deeds of God through the Christians (Paul E. Chevedden195). The pope Urban said that all who fought would be forgiven of their sins and that they would go to heaven if they died in battle. If you are killed your sins will be pardoned. (Pope Urban 1095, found on http://www.historylearningsite.co.uk/cru1.htm?ref=Guzels.TV). The pope declared that when killed in war the person would go to heaven, no matter what sin he committed in life. The men who joined would also be pardoned from taxes and other expenses. Another hope that people joined for was the hope that Jerusalem had riches and gold beyond the imagination. People from all over joined a group and they marched, or sailed over to the east Mediterranean and fought to control the lands that once belonged to the Christians. They traveled though France, Italy, all though Eastern Europe, and then through whats now called Turkey. They were able to cross a large amount of land a sea and still have numbers to fight only because they started out with so many that even if half of them died, with an uncountable amount did, they would still have an army to fight with. The men who died on the way died from starvation, dehydration, maul nutrition, sickness and illnesses that would be passed through the men unchecked. The men would sometimes get food from towns and villages, but other times they would eat the fesses and drink their urine. Christians from all classes joined in hopes that their sins would be forgiven by god by fighting in Gods War but a lot of them didnt even get to the battle grounds. The Muslims fought to get control of Jerusalem because their founder, Muhammad, had lived there for a time. The Muslims had a sacred place called the Dome of the Rock, this place was a place of meditation where Muhammad, the founder of the Muslim religion, prayed and sat. The city was sacred to the Muslims, just like it was sacred to the Christians (http://www.historylearningsite.co.uk/cru1.htm?ref=Guzels.TV). The Muslims understood the meaning of the crusades and fought back, but once the city of Sicily was taken by the Christians they could not be stopped. They fought and they tried to keep their land, but the Christian force was to strong. The church believed that the Muslims were endangering the people, who still lived in the east, and they thought that they needed to restore the Christian culcher in the east. The church also had many kings and queens supporting them, which include their armies. The Christians were concentrating on re-conquering Jerusalem because thats where Jesus lived for some time. They saw the city as the City of God. This was also the place where Jesus was crucified on Calvary hill. Pope Urban the II also wanted to go into Africa and liberate the people there. In a way the church was planning a mass invasion of countries that were not a part of their religion. The Christians thought that they were doing the right thing by going and converting people into their religion. The pope wanted more land to be under his control, under god. The similarities of the views of the First Crusades were extremely similar; they were enantiomorp (mirror-image). The Muslims new that the war was to take back lands lost by the Christians hundreds of years before the First Crusade. They also understood that the First Crusade was aimed for Jerusalem and the lands around it. The Christians set out wanting to help other Christians that live in the Mediterranean that was now under control of the Muslims. The Muslims new this and called it jihad. This word means struggle, fight, basically what a crusade was. They understood the meaning of the First Crusade but they did not have the power to fight it, even with the help they had from the Turks in protecting the land. The Christians had once controlled the whole Mediterranean. They had a kingdom set up where everyone had a king but the king answered to the Church, to god. Pope Urban the II called war on the Muslims in 1095, the first Crusade started to move in 1096. The Pope latter called this the changing times from Dan 2:21. By this he said that the times of change spoken of in the bible are coming true and that the First Crusade, the one that when to liberate Jerusalem, set this into play. He thought that he was changing the world for the better; he thought that the Christians that lived in Muslim land would be much happier if the church came in and free them from the tyranny of the Muslims. The Christian and the Muslims had very similar ideas, but both thought that the other was wrong and that they were doing wrong and should be stopped and/or killed. Both sides thought that the other side would harm or desecrate the city of Jerusalem. The Muslims did not want a mass war over the Mediterranean, but once they heard of it they seemed to know what was happening. The Church wanted to have control over the areas of land that had once been theirs, and also because they had enough forces they thought that continuing to Asia and Africa would help people. By doing this the church had made many enemies and had become a hated symbol in some of its new lands. The Church not only went after the Muslims in Islam, but they also helped Venus in their war with the Turks in the island near them. They did this because they needed more ships to get across the Mediterranean, so they made a deal. The crusaders would kill some Turks to get enough ships to sail to the west. In another crusade to many men were dying because of the long road, so they decided to go and kill the nearest town of Jews and make it a trip. So thats what they did and then they went home. Other detours for other groups of crusaders also happened over the different crusades with different religions. The First Crusade was important because not only did it kill many people and give the Christians Jerusalem back, but it caused other Crusades to happen after. The Muslims fought to keep Jerusalem and the pope after Urban declared that the city must be under Christian rule. The First Crusade changed a lot in the world. It was the reason for many deaths and unhappiness. The pope called it a change in time, and specific crusade was. It changed time so that even today people are affected by it. If one thinks about it, the crusades might have been a reason that racism became such an extreme between the Muslims and white countries who are heavily involved with Christianity. The mass war in 1096 lasted for over 200 hundred years, off and on. The people in charge changed as well as the people who were affected by it. Several alliances were severed by the crusades. The pope expected a lot out of his kings and queens, including their people, armies, fighting experience, food, water and money. Pope Urban and the popes after him also expected to be able use the people again and again till the destination was won. Because Jerusalem was once again taken over by Muslims and put back into the land of Islam, the Christians had to keep remaking the crusades and rebuilding their forces and numbers. As one can imagine, because of this people began to become more rebellious towards the crusades. Eventually the pope could not get enough people willing to fight and join the crusades for a battle that would last to about 1291. Years after the First Crusade, the city Edessa was lost to the Turks, once again, so that meant that the Christians had to get it back in the second crusade in 1147-1149. The strong Turks were said to have kill many people and show no mercy to the inhabitants. Another threat to the Christians were the growing forces to the east, the Muslims were getting stronger once again. The pope called for help and Bishop Eugenius III answered and helped. But his efforts were not enough; a lot of people were killed off before they even reached the holly land. Turks followed one of the groups and killed many in sudden attacks. (http://dmbinns.com/secondcrusade2.htm) The Christians still believed after all of this that the power over the city a priceless thing, but the Christians said some things that were seemed like gloating, even though they failed to protect a lesser city to Jerusalem. Sisnando Davidiz, a count who served under Fernando I, king of Leon-Castile, said: We seek only our own lands which you conquered from us in times past at the beginning of your history. Now you have dwelled in them for the time allotted to you and we have become victorious over you as a result of your own wickedness. So go to your own side of the straits (of Gabraltar) and leave your hands to us, for no good will come to you from dwelling here with us after today. For we shall not hold back from you until God decides between us. (Paul E. Chevedden 189) The Christians and its followers seemed happy with themselves after they won back so much land and more so they were okay when they kicked the Muslims out. They took homes and land away from hundreds of families. The questioning part of this statement by Davidiz, is why did he say until God decides between us? Does he mean in religion, what religion is favored by god? or until god puts a physical barrier between Islam and Europe? It seems rather strange that he would question their gods love for them. Years after the Muslims regained control, in the third Crusade in 1189-1192, the Lion King and the Muslims made a three year treaty so that Christians could come and visit the city. The Church thought these were wrong and bands the Lion King. The Lion King was Richard I of England, and had fought in the crusades before with other power figures (http://www.historylearningsite.co.uk/cru1.htm?ref=Guzels.TV). The Church had used an Old Testament sin-punishment-restoration cycle (Paul E. Chevedden195) and put it into the Christians history. Pope Urban hoped that this system would help the recovery of the lost lands to Islam and gain some population. The crusades, specifically the first, impacted the world in a bad way. The crusades brought death and suffering to many that were not Christians and many who were Christians. The killing engulfed Europe, a small portion of Africa and Asia. This war seemed to have maximized racism between the Christians and the Muslims, and all who came between. The violence that was created by the Christian pope Urban II was because of a religious city that could have been sheared. Even when that was a possibility, the pope bands it and called the makers of the treaty sinners. Even the tactics the pope used to gain followers was wrong and deceitful. He told people that All who die by the way, whether by land or by sea, or in battle against the pagans, shall have immediate remission of sin (http://www.fordham.edu/halsall/source/urban2-fulcher.html). This would bring significant numbers of people of all classes and ages. It would also attract people who are sick, dyeing, and old. This may be the cause of the many deaths on the way to Jerusalem. The First Crusade seemed to have several components to it. First, it had a way for the Christian church to spread its beliefs and culcher. Second, it allowed Christians to regain control over the city of god. Third, the pope was able to have more control over more land. The crusades seemed to be a pointless war that could have been avoided if the Christians would have simply shared their holy city with another religion that would have respected it as such. the many useless fight over cities and boarders would not have happened if the Christians learned to respect other religions in that time. Work Cited Books: 1. What Were the Crusades? Jonathan Riley-Smith 2. The Islamic View and the Christian View of the Crusades: A New Synthesis Paul E. Chevedden Non-Prints: 3. Documentary, BBC An Islamic History of Europe 4. www.historylearningsite.co.uk/cru1.htm 5. http://gbgm-umc.org/umw/bible/crusades.stm 6. http://www.fordham.edu/halsall/source/urban2-fulcher.html got it from From Bongars, Gesta Dei per Francos, 1, pp. 382 f., trans in Oliver J. Thatcher, and Edgar Holmes McNeal, eds., A Source Book for Medieval History, (New York: Scribners, 1905), 513-17 7. http://dmbinns.com/secondcrusade2.htm Scholarly Journal: 8. The Islamic View and the Christian View of the Crusades: A New Synthesis Paul E. Chevedden