Stakeholder Relationship Governance

Topics: Management, Stakeholder theory, Business ethics Pages: 7 (2454 words) Published: May 5, 2013
Roles of stakeholders
Every organisation has stakeholders. Examples of stakeholder groups (beyond stockholders) are employees, suppliers, customers, creditors, competitors, governments, and communities. They often affect the corporation, law and markets but actually it consists of senior management, managers and employees. In this assignment, we will discuss role of stakeholders in terms of identification of learning and development within organisation, what is the nature and application of the practice of learning and development in context of relevant theories and models. Before describing anything, we need to understand the actual meaning of ‘stakeholders’ term. The term "stakeholder" appears to have been invented in the early '60s as a deliberate play on the word "stockholder" to signify that there are other parties having a "stake" in the decision-making of the modern, publicly-held corporation in addition to those holding equity positions. Professor R. Edward Freeman, in his book Strategic Management: A Stakeholder Approach (Pitman, 1984), defines the term as follows: “A stakeholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the organization's objectives” (cited in Freeman, 2010). The classic definition of a stakeholder is ‘any group or individual who can affect or is affected by the achievement of the organisation’s objectives’. At its broadest and most ambitious, the stakeholder concept represents a redefinition of all organisations: how they should be conceptualised and what they should be (Friedman and Miles, 2006, pp. 1–2). Yamak and Süer (2005, p. 111) state that CSR has emerged as a major topic following recent corporate scandals, which may also be interpreted as the demise of shareholder theory (a manager’s duty is to maximise shareholders’ returns) and the rise of stakeholder theory. The shareholder theory and the stakeholder theory are two patterns that stand out as explanation of corporate behaviour. Stakeholders are entitled to some rights and interests because they are central to the existence of any business. Problems of corporate governance arise when the rights of stakeholders are violated (Bhasa, 2004, p. 6). Expectations of stakeholders—but also their risk-taking behaviour and interdependencies—will differ according to changing levels of risk. Managers are assumed to ensure that the ethical rights of all stakeholders are respected and balanced. To balance profit maximisation with the long-term ability of the corporation to remain a going concern, therefore, surfaces as the ultimate goal of the firm or organisation. In a study that enabled multiple stakeholder discourses, the stakeholder–agency perspective where the organisation is viewed as a ‘nexus of contracts between resource holders (stakeholders)’ was developed (Cited in Beer & Rensburg, 2011). Although many existing models contain constructs that can explain certain aspects of the stakeholder governance phenomenon, a strategic management model and a communication management model were identified in this article, to address the phenomenon of stakeholder relationship governance in a holistic manner. The main aim is to develop a new theoretical framework from the stakeholder-oriented integrative strategic management model (Katsoulakos and Katsoulacos, 2007) and the definitive model of the identity management process (Stuart, 1999). These models encapsulate in different ways the interrelationships between the relevant concepts of this article, namely corporate governance, sustainability, strategy, communication, stakeholder relationships and corporate reputation. However, a new theoretical framework that explains the phenomenon of stakeholder relationship governance will have to be developed. It will contain the relationships and outcomes that will be needed to understand a new paradigm for the academic field of strategic communication management (cited in Beer & Rensburg,...

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