BHP And Stakeholder Theory

In my opinion, BHP should pursue the stakeholder theory due to many reasons that aligns with the objectives they should be pursuing. The objectives that BHP should be aiming towards are sustainability by avoiding going into debt and to regain their reputation. It is because mining industries, such as this, influences …”the economically significant, attract relatively high levels of public and media attention, and are subject to a wide range of regulatory requirement.” (Herbohn, Walker & Monica Loo, 2014). This means that BHP is under surveillance the whole time by the public and the government and if one mishaps occur it could lead to their downfall. Therefore, BHP would have to maintain their reputation by constantly being acknowledged by …show more content…
By cultivating loyal customers it will allow BHP to retain market share since loyal customers can be recognised like a fixed asset where there is a long-term relationship between BHP and the customers. It can be related to tourist industry where customer loyalty is crucial in the competitive market by providing superior customer service and designing their websites that are easily accessible, extensive information and easy to navigate so it gives a great impact in their minds so they would return to the website to search for information (Kaur & Sharma, 2015). In BHP case, a mining industry should provide a superior offer and service to their buyers. For example, BHP could offer a better deal such as buying in bulk would receive a discount, delivering the order in time, flexible and many more. By accomplishing this, the buyer would deem the company trust worthy and satisfy their needs and …show more content…
Therefore, even though BHP practices corporate social responsibility and has a high costs, they would still be able to attract investors, reliable consumers and motivated employees that can result in an increase in productivity knowing that the company cares for their interests.. Hence, BHP would be more sustainable. In addition, BHP would be able to exploit the advantages of being a corporate social responsibility. This can be seen where Nordic firms uses more explicit strategies and anti-ethical Scandinavian business tradition by using charitable contributions to reduce tax (Strand, Freeman & Hockerts, 2015). Thus, despite being a corporate social responsibility does not mean you have to abide the rule of the game rather it can be used as an exploit. However, by contributing to the disaster could expose the BHP to a high risk of bankruptcy. On the other hand, shareholder theory is less suitable especially in their current circumstances. BHP is in a dire situation since there shares have fallen by 20% and it can be assumed that their share price is declining since shareholders do not consider it as