Me as a Stakeholder in Business

I have been a primary social stakeholder in various companies and in several situations. I have been an employee of private and public corporations, I have owned shares in public and private corporations, I currently own my own private company and work for a privately owned corporation, and I have been in the business of selling to private and public corporations and been a consumer of hundreds of organizations for pretty much my entire life.

Really, this resume is not dissimilar to the resume of most people. Based on the commonly accepted business environment stakeholder theories that exist, anyone who orders a Big Mac is a stakeholder in McDonalds and anyone who lives within 5 kilometers of a Burger King is a stakeholder in Burger King, even if they've never spent a dime in that store.

It occurs to me that this is a huge responsibility for corporations to take into consideration. It is impossible for any one person to please everyone, and the same can be said for any large organization. I was actually beginning to scoff at the whole idea of it until I came across the concept of various stakeholders holding different levels of legitimacy, power, and urgency as stakeholders in a company. This concept really completes the argument for the stakeholder synthesis approach. By this argument a corporation is ethically responsible to everyone (which is important if I'm going to enjoy a whopper without catching e.coli) but only maintains a fiduciary responsibility to those stakeholders who possess the right attributes, specifically the Definitive Stakeholders who are legitimate, and have the power to effect change in an organization.

To my recollection, the only secondary social stakeholder role I've ever held is that of a competitor, but I have seen many instances of secondary social stakholders becoming primary stakeholders quite quickly. I once worked with an Oil & Gas company and had the opportunity to assist them in the prepartion of their ERP (Emergency Response Plan). The ERP is another example of society setting requirements for companies to protect the safety of the public. Part of the ERP plan dealt specifically with the handling of media in the event of a disaster. Quite literally, this is an example of the crises management process outlined in chapter 3. In such an event, the media can very quickly become a primary stakeholder as they hold the future reputation of a company in their hands. Corporations must be prepared to handle such sudden shifts in stakeholder attributes.

The Multiple Bottom Line Perspective

The Multiple Bottom Line Perspective -- Wednesday August 31, 2011

The mulitple bottom-line perspective focuses on how a comapnies social performance is interfering with its financial performance, and reputation.

There are three perspectives regarding this theory:

Perspective 1: A socially responsible firm is more financially profitable which leads to a good reputation. The concept behind this is that a good social performance attracts more shareholders (who for example share the company's attitude), which then earns the company more financial capital to work with which in turn strengthens the reputation. The good reputation then leads to attracting even more shareholders and this financial capital can be put towards more social performance. This circle is beneficial for the company, its employees who will be treated fairly, the shareholders because the value of their investments in the company increases, and the society as a whole.

Perspective 2: Here, a firm's good financial performance increases social performance, because they'd like to give more back to the community as they have more benefit. As the benefits increase and the company can spend more money on social activities, the public will hear about it which will increase the company's reputation. This is beneficial for the compamny, the shareholders (after all a good reputation leads to a higher attrictiveness to other shareholders