Society exists because human beings do not live in isolation and businesses play a leadership role in shaping the society because it has an important influence over the distribution of resources of society. Since the businesses use the resources of the society to gain private profit, they have a moral obligation to repay the society. (Ryan, N., Parker, R., & Brown, K. 2003). Businesses have clearly identified this responsibility and have started taking up the challenge to legitimate its practices to society at large. This in the last decade has been commonly referred to as Corporate Social Responsibility – CSR (Crane, A., Matten, D., Spence, L. 2008). As Carroll (1979, cited in Carroll, 1991) states that, CSR included the idea that the corporation has not only economic and legal obligations, but ethical and discretionary (philanthropic) responsibilities as well. However, the definitions of the term CSR may depend on individual perceptions of responsibility that in turn relate to the bigger picture defining the role of the organisation in society (Crane and Matten 2004:439, cited in O’Riordan et al., 2008). Briefly as, O’Riordan J. and Fairbass J. (2008) state that the concept of CSR encompasses many dimensions of business activity ranging from the social (e.g. community programmes), to economic (e.g. employment) to the environmental (e.g. waste reduction). I am of the opinion that as a part of fulfilling CSR obligations, business managers have to engage with their stakeholders, an activity that may be defined as stakeholder dialogue to determine appropriate business behaviour and by doing so they are looking after the best interests of the business organisation. In support of my above statement, I agree with what Murray and Vogel (1997:142, cited in O’Riordan et al., 2008) have stated that stakeholders, acting both formally and informally, individually or collectively, are a key element in the firm’s external environment that can positively or negatively affect the organisation. The term ‘stakeholders’ is broad in scope and have been defined as all those with a ‘critical eye’ on corporate actors (Bowmann-Larsen and Wiggen 2004, cited in O’Riordan et al., 2008). Freeman (1984:52, cited in O’Riordan et al., 2008) states that stakeholders are “Groups and individuals who can affect or are affected by, the achievement of an organisation’s mission”. However, I stand by Clarkson’s (1995) definition of stakeholders as stated in Crane and Matten (2010). Clarkson states that stakeholders “Have, or claim, ownership, rights, or interests in a corporation and its activities”. I would like to draw here an example of the Ports of Auckland as an organisation where I face a tough challenge as a manger to identify to whom and for whom we as an organisation are responsible, and how much can that responsibility be extended. It is a challenge to manage the relationship between the business and its stakeholders as the issues are quite divergent and a lot of the time they can be quite conflicting when I try to understand the expectations between the various stakeholders (Clarkson, 1995). I would like to use a very recent example whereby the Ports of Auckland played a significant part in the opening ceremony of the Rugby World Cup 2011. The challenge that I faced was to strike a balance between that of both the primary stakeholder group and the secondary stakeholder group. As a result of the fireworks display and a considerable part of the waterfront being cordoned off, all shipping activity was ceased from 1800 hours to 2359 hours. This had a direct impact on the primary stakeholder group such as the shipping lines and the trucking companies delivering containers on the wharfs. This would directly impact the profitability of the organisation which in turn affects the share price of the company. As Clarkson (1995) rightfully points out that if any primary stakeholder group, such as customers or suppliers, become dissatisfied and...
References: Carroll, A.B. (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organisational Stakeholders. Business Horizons, July-August 1991.
Clarkson, M.B.E. (1995). A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance. Academy of Management Review, 20, 1, 92-117.
Crane, A. & Matten, D. (2010). Business ethics. Oxford: Oxford University Press.
Crane, A., Matten, D., & Spence, L. (2008). Corporate Social Responsibility: Readings and Cases in Global Context. (pp. 3-20). London: Routledge.
Donaldson, T., & Preston, L.E. (1995). The Stakeholder Theory of the corporation: Concepts, Evidence, and Implication. Academy of Management Review, 20, 1, 65-91.
Reynolds, S.J., Schultz, F.C., Hekman, D.R. (2006). Stakeholder Theory and Managerial Decision-Making: Constraints and Implications of Balancing Stakeholder Interests. Journal of Business Ethics, 64, 385-301.
Ryan, N., Parker, R., & Brown, K. (2003). Government, Business and Society Frenchs Forest. NSW: Prentice Hall.
O’Riordan, L. & Fairbass, J. (2008). Corporate Social Responsibility (CSR) Models and Theories in Stakeholder Dialogue. Journal of Business Ethics, 83, 4, 745-758.
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