(a) Define stakeholders. Describe some potential organizational stakeholders and why are stakeholders important? (6mrks) Stakeholders are individuals or groups that have a stake in, or are influenced by the organization’s decisions and actions. They can, in turn, influence the organization’s actions, objectives and policies. The lecture cited examples of potential organizational stakeholders are shareholders (owners), customers, employees, suppliers, trade associates, political action groups, social action groups, and the community from which the business draws its resources (Onywere, 2013). Since stakeholders are individuals who are affected by or can influence an organization throughout its life, their ongoing participation is paramount to organizational success. Without the ongoing participation of stakeholders, it is hard for a company to survive, as companies and stakeholders are mutually interdependent. “Thus, stakeholders and their engagement are important in helping a company express its values, carry out its mission, develop strategies, implement processes and improve relationships on a continuous basis” (Richards-Gustafson, (n.d, para 1).
(b) Describe the traditional view of corporations? (7mrks)
Traditional view of corporations held that the shareholders or stockholders are the owners of the company, as such; the firm has a binding fiduciary duty to put their needs first, increasing value for them (Miles, 2011, para. 1). This view, also known as the shareholder view believed that corporations existed solely to serve the interests of shareholders. It was largely an economic view, with costs and profitability as the key focus. “This view suggested that the needs and desires of society could best be met by the unfettered interaction of individuals and organizations in the marketplace” (Barnett, (n.d), para. 6). By acting in this self-interested manner, individuals would focus on producing and delivering the goods and services that would...
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