Freeman and McVea (2001, p10) state that the stakeholder approach in management recommends devising and applying processes that bring satisfaction to any and everyone with stake in the business. Some of the stakeholders involved in businesses are the shareholders, customers, employees, community and suppliers. According to Johnson & Johnsons Credo values (Johnson, 1943), some of the advantages of applying the stakeholder approach in management are as follows:
• Employee goals become aligned with company goals as the company's success has a direct effect on the employees. They are more secure in their jobs and are more willing to work diligently, be innovative, make suggestions and complaints that can benefit the company and in turn possibly …show more content…
A profitable business makes investors more confident to finance new ideas and projects.
As Freeman (2010, p8) discusses all stakeholders are inter-related and a down fall with one stakeholder may have a ripple effect on the rest. Therefore, stakeholder approach management allows an organization to make decisions that have all stakeholders at heart which results in prosperous company in the long term.
The disadvantages of a stakeholder management approach as Freeman (2010, p8) also adds is that some stakeholders are difficult to please and may draw back decision making progress.
Disregarding stakeholders’ advice in decision making can lead to distrust and stakeholders lose their confidence in management (Ryckman)
There is also the issue of some stakeholders deeming themselves more important than others and therefore driving decisions. This is shown in a case study that was done on etv by Copelyn & Wood (2014). The shareholders believed that the slow rise in revenue and thus an increased time to reach breakeven and profits indicated a termination of the business, without considering viewers choices, and employees …show more content…
All employees are treated with respect and are appreciated for their input to the organization at all levels. From the beginning, I was made to feel as part of a team and that I had a big role to play. There is an open platform to make suggestions and complain even about management, respectfully, which gives a sense of community within the organization. There are however, some stakeholders, such as a certain supplier, who refuse to take our advice with respect to price strategies which has an effect on our sales and hence
• Employee goals become aligned with company goals as the company's success has a direct effect on the employees. They are more secure in their jobs and are more willing to work diligently, be innovative, make suggestions and complaints that can benefit the company and in turn possibly …show more content…
A profitable business makes investors more confident to finance new ideas and projects.
As Freeman (2010, p8) discusses all stakeholders are inter-related and a down fall with one stakeholder may have a ripple effect on the rest. Therefore, stakeholder approach management allows an organization to make decisions that have all stakeholders at heart which results in prosperous company in the long term.
The disadvantages of a stakeholder management approach as Freeman (2010, p8) also adds is that some stakeholders are difficult to please and may draw back decision making progress.
Disregarding stakeholders’ advice in decision making can lead to distrust and stakeholders lose their confidence in management (Ryckman)
There is also the issue of some stakeholders deeming themselves more important than others and therefore driving decisions. This is shown in a case study that was done on etv by Copelyn & Wood (2014). The shareholders believed that the slow rise in revenue and thus an increased time to reach breakeven and profits indicated a termination of the business, without considering viewers choices, and employees …show more content…
All employees are treated with respect and are appreciated for their input to the organization at all levels. From the beginning, I was made to feel as part of a team and that I had a big role to play. There is an open platform to make suggestions and complain even about management, respectfully, which gives a sense of community within the organization. There are however, some stakeholders, such as a certain supplier, who refuse to take our advice with respect to price strategies which has an effect on our sales and hence