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Organisational Stakeholders And Change Essay

3219 words - 13 pages

REG. NO.: D64/71259/2014



This is a social arrangement for achieving controlled performance in pursuit of collective goals. (Buchanan and Huczynski, 2004)

Another definition is that an organization is a group of people brought together for the purpose of achieving certain objectives. As the basic unit of an organization is the role rather than the person in it the organization is maintained in existence, sometimes over a long period of time, ...view middle of the document...

On the other hand, a more proactive viewpoint is that it is triggered by a progressive manage

Change can either be internal or external. Both the internal and external change have drivers and they are as follows:

Internal Change
* Shareholders
* Customers
* Employees
* Suppliers

External Change
* Government
* Competitors
* Consumer advocates
* Special Interest groups
* Media

Managerial View of the firm




Corporation and its managers


Change has occurred in each of the relationships in the figure above. Such changes are internal to the conceptual system that the managerial view represents. Internal change requires us to constantly reassess current objectives and policies in light of new demands by groups that we are used to dealing with such as customers, employees and their unions, stockholders and suppliers. Internal change requires action but it does not directly challenge our conceptual map of the world (R. Edward Freeman, 2010)
No longer can management assume that the primary concern of those who own shares of stock is return on investment. The 1960’s were a ripe period for owners who wanted not only returns, but control as well. Thus the Wall Street rule, “if you don’t like the managers, sell the stock” was turned on its head to, “if you don’t like the management, buy enough stock to throw the bums out”

The Wall Street journal is full of news on mergers, takeovers and white nights. The CEO who only worries about paying dividends to stakeholders or increasing the value of their equity by earnings per share and stock price increase, is sure to be a prime candidate for unemployment through takeover Of course if the P/E is high enough the chances of takeover will be greatly diminished, and we see that some CEOs have emphasized the P/E ration at the expense of making needed investments for the future.
The dilemma is the well known trade off between short term results and long term health by, concentrating in the short term, in the form of managing the P/E ratio the CEO maintains a margin of safety from takeovers, However, by doing so the company becomes vulnerable to competitive attacks, rapid declines and eventual takeover bids, negating the very margin of safety provided by high P/E ratios.

The relationship with owners has changed in second way. In 1969, Ralph Nader announced the formation of campaign GM, a group which bought two shares of General Motors stock and intended to wage a proxy fight on social issues including the need for public transportation, and the rights of women and minorities and on business issues such as product design for safety and emissions control.

For many years American businesses were dominant at home and their technology was dominant worldwide. That dominance has ended. Customers have many more choices today, and...

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