Assignment: Investors and Shareholders
Assignment: Investors and Shareholders
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Assignment: Investors and Shareholders
Assignment: Investors and Shareholders

Assignment: Investors and Shareholders

In a business context, customers, investors and shareholders, employees, suppliers, gov- ernment agencies, communities, and many others who have a “stake” or claim in some aspect of a company’s products, operations, markets, industry, and outcomes are known as stakeholders . Business influences these groups, but these groups also have the ability to influence business; thus, the relationship between companies and their stakeholders is a two-way street. 2 Sometimes activities and negative press generated by special interest groups force a company to change its practices. For example, consumer groups have put pressure on government and business to decrease the amount of sodium, sugars, and other fatty ingredients in fast food and sodas. This increased pressure as well as the trend toward healthier food prompted Olive Garden, Red Lobster, and Carl’s Jr. to reduce the amount of sodium in some menu items. Additionally, Boston Market removed salt shakers from tables in their restaurants. 3

There are three approaches to stakeholder theory: normative, descriptive, and instrumental approaches. 4 The normative approach identifies ethical guidelines that dictate how firms should treat stakeholders. Principles and values provide direction for normative decisions. The descriptive approach focuses on the actual behavior of the firm and usually addresses how decisions and strategies are made for stakeholder relationships. The instrumental approach to stakeholder theory describes what hap- pens if firms behave in a particular way. 5 This approach is useful because it exam- ines relationships involved in the management of stakeholders including the processes, structures, and practices that implement stakeholder relationships within an organiza- tion. The survival and performance of any organization is a function of its ability to create value for all primary stakeholders and attempt to do this by not favoring one group over the others. 6

Many firms experience conflicts with key stakeholders and consequently damage their reputations and shareholder confidence. While many threats to reputations stem from uncontrollable events such as economic conditions, ethical misconduct is more difficult to overcome than poor financial performance. Stakeholders most directly affected by negative events experience a corresponding shift in their perceptions of a firm’s reputation. On the other hand, firms sometimes receive negative publicity for misconduct that destroys trust and tarnishes their reputations, making it more difficult to retain existing customers and attract new ones. 7 To maintain the trust and confidence of its stakeholders, CEOs and other top managers are expected to act in a transparent and responsible manner. Providing untruthful or deceptive information to stakeholders is, if not illegal, certainly unethical, and can result in a loss of trust. Brian Dunn, former CEO of Best Buy, was fired for having an inappropriate relationship with an employee. Richard Schulze, founder of Best Buy and former Chairman of the company, was also ousted when it was determined he knew about the relationship but failed to report it to the audit panel of the board.

You must proofread your paper. But do not strictly rely on your computer’s spell-checker and grammar-checker; failure to do so indicates a lack of effort on your part and you can expect your grade to suffer accordingly. Papers with numerous misspelled words and grammatical mistakes will be penalized. Read over your paper – in silence and then aloud – before handing it in and make corrections as necessary. Often it is advantageous to have a friend proofread your paper for obvious errors. Handwritten corrections are preferable to uncorrected mistakes.

Use a standard 10 to 12 point (10 to 12 characters per inch) typeface. Smaller or compressed type and papers with small margins or single-spacing are hard to read. It is better to let your essay run over the recommended number of pages than to try to compress it into fewer pages.

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The paper must be neatly formatted, double-spaced with a one-inch margin on the top, bottom, and sides of each page. When submitting hard copy, be sure to use white paper and print out using dark ink. If it is hard to read your essay, it will also be hard to follow your argument.