CSR

Corporate Social Responsibility

Corporate Social Responsibility

Topic 1: Company's external stakeholders

The concept 'stakeholder' is a variant of 'stockholder', which relates to 'investors in' or 'owners in' a firm or business. Stakeholders can be defined as 'individuals and groups who are affected by the activities of an organisation. The most important stakeholders can be seen as those with most to lose from the organisation's actions, but this does not always reflect their relative power (Pickstock 2007, 30-32).

In the past it had been the common conception that businesses fundamentally rely upon, and in turn effect their economic capital, which is represented in the form of stockholders. The rise to prominence of stakeholders (through studies and reports) has allowed firms to realise that there are people and infrastructure beyond the company which are necessary to it and who must have their interests protected (Badaracco 2005, 8-28). An organisation's stakeholders are all parties who can reasonably be understood to be affected by its decisions. They can be deemed to represent the businesses' social and environmental capital as well as economic. Stakeholders can be of very different and varied guises and also harbour conflicting interests. In the main they can be categorised into three major groups: Internal, Connected and External Stakeholders (Martin 2001, 45-49).

Internal stakeholders include managers and employees and are those that are situated within the company and affect the 'day-to-day' running of the organisation. Connected stakeholders cover groups such as shareholders, suppliers and customers, and are parties which invest or have dealings with the firm. The third group, External stakeholders, are those not directly linked to the organisation but who can be influenced or influence activities of the firm through various means. External stakeholders include the Government, neighbours, pressure groups, local councils and the surrounding community (Johnson 2001, 14-18). .

As well as stakeholders, organisations and the people involved with them are expected to adhere to written and unwritten ethical boundaries. The degree to which these are adhered depends upon as varied a mixture as government enforced action to simply the moral fibre of a manager or employee. On occasions only the 'eye of the beholder' can truly acknowledge whether the moral considerations were taken on board when making a decision (Arjoon 2003, 99-117). This makes gauging an organisations ethical stance very difficult as the image they portray to the public may not match the internal reality. 'The ethical environment refers to justice, respect for the law and a moral code. The conduct of an organisation, its management and employees will be measured against ethical standards by the customers, suppliers and other members of the public with whom they deal (Post 2002, 15-19).

Stakeholders are found in all organisations, businesses or firms - from a local grocer store to huge multinational companies such as Coca-Cola, McDonalds and Microsoft. The number of stakeholders per business will vary as will their importance and influence. The type of organisation or product / service it supplies will also determine its stakeholders. A Public Limited Corporation may have far more stakeholders ...