Chapter 2 exam 1 Flashcards
(16 cards)
What is Stakeholders?
people and groups to whom the organization is responsible.
Historical view: a relatively small group of market constituencies (shareholders/other investors, customers, employees, suppliers and other business partners)
Latter half of 20th century: perceptions evolve of business’ expanded responsibilities; expand focus to nonmarket constituencies (general community, government, media & others)
21st century view of stakeholders? Adam Smith Enlightened Capitalism
businesses that consider needs of both market and nonmarket constituencies (i.e., all stakeholders) earn trust and cooperation which reduces costs and increases profits
Studies show CSR affects employee commitment and customer loyalty
What is a primary stakeholder? Give examples
- continued associations necessary to survival to organization (essentially market constituencies and government/communities)
- primary groups present day-to-day focus
example: consumers, shareholders, employees, suppliers
What is a secondary stakeholder? Give examples
- do not typically engage in transactions with the company so not essential for survival
- secondary groups cannot be ignored, especially in ethical decision-making process
examples: media, trade associations, special interest groups
What is a stakeholder orientation?
-degree to which a firm understands stakeholder demands
-Activities:
Organization – wide generation of data about stakeholder groups and assessment of the firm’s effects on these groups
Distribution on this information through the firm
Organization’s response to this information
What is a stakeholder interaction model?
-conceptualization of relationship between business and stakeholders in which there are two-way relationships between firm and many stakeholders
What is the importance of a stakeholder attribute? and what are the three specific attributes?
Necessary to understand both content (specific issues) and process (actions, tactics) of each stakeholder relationship
3 Specific Attributes:
Power
Legitimacy
Urgency
Explain the 3 kinds of stakeholder attributes
- Power – ability to gain access to the organization to impose or communicate its views on the organization
a. Coercive Power – physical force, violence or some other type of restraint
b. Utilitarian Power – financial or material control
c. Symbolic Power
2.Legitimacy – the perception or belief that a stakeholder’s actions are proper, desirable, or appropriate
3.Urgency- Time sensitivity;
Importance of the claim to the stakeholder
Explain the importance of reputation management
Because a company’s reputation has the power to attract or repel stakeholders, it can be either an asset or a liability in developing/implementing strategic plans and CSR initiatives.
**Whereas a strong reputation may take years to build, it can be destroyed seemingly overnight if a company does not handle crisis situations to the satisfaction of the various stakeholders involved.
What are the four components of reputation management and explain each one of them
Four components to reputation management:
- Organizational identity: how organization wants to be viewed by stakeholders
- Image: how stakeholders interpret various aspects of the organization
- Performance: interaction between the organization and its stakeholders
- Reputation: interaction of organization and stakeholders
What is Crisis Management?
the process of handling a high-impact event characterized by ambiguity and the need for swift action
- Frequently in the form of an ethical misconduct disaster (EMD): an unexpected crisis that results from employee misconduct, illegal activities such as fraud, or unethical decisions that threaten disruption of the organization
- Threats to an organization’s high priority goals, surprise to its members, and stakeholders demands for a short response time
What are the steps in crisis management process? (Medical Analogy)
Prodromal
Acute
Chronic
Prodromal
*Failure to manage can lead to business mortality
What are the issues in Crisis Management?
- Communication
- Quick
- May be ambiguous - Content
- Express concern/remorse
- Guidelines on what it plans to do to address crisis
- Explicit criteria as to how each stakeholder group will be compensated for effects of crisis - Accurate
- Balance needs of stakeholders
What is Social Capital?
- An asset that resides in relationships and is characterized by mutual goals and trust
- Facilitates internal and external transactions and processes
- Unlike financial and intellectual capital, social capital is not tangible or the obvious property of one organization
How to implement a stakeholder perspective in CSR
- Assessing the Corporate Culture
- Identifying the Stakeholder Groups
- Identifying Stakeholder Issues
- Assessing Organization’s Commitment to CSR
- Identifying Resources and Determining Urgency
- Gaining Stakeholder Feedback
What are the links between Stakeholder Relationship and CSR?
-Social responsibility is relational – involves views and stakes of a number of groups
-Stakeholder relationships both support and challenge the organization
-Without understanding stakeholders and issues, organizations may miss trends and changes in environment that could impact its CSR
-Measurement
Effectiveness resides in the relationship between stakeholder and
Reactive-Defensive-Accommodate-Proactive Scale
Reactive - deny responsibility
Defensive - admits responsibility but fights it
Accommodate - accepts responsibility
Proactive - anticipates responsibility
