Stakeholders International Business the Business World Has Essay

Download this Essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Essay:

Stakeholders International Business

The business world has seen many evolutions over the centuries. One constant, however, remains that the central premise of business has always been to provide in a perceived need; whether this need has been somewhat created and artificially perceived, or manifests itself as an actual need. Businesses have also always had stakeholders. The way in which businesses have managed their relationships with stakeholders have, however, also significantly evolved. During the industrial age, particularly, businesses were so focused on profit and speed of service that they tended to neglect their internal stakeholders in favor of the external ones. Externally, they tended to also favor those who could directly benefit the business over those who were directly affected by their practices. Today, business ethics are at the heart of many stakeholder relationships. One of the most significant evolutions the world of business has seen since the industrial age is globalization. This phenomenon brought with it a range of new ethical issues and types of stakeholders to consider. To survive in the competitive global business world of today, it has become vital for businesses today to define and take into account the needs of their internal and external stakeholders in terms of influence and business ethics.

In a general definition of the concept of stakeholders, Mullins (2010, p. 714) notes that this is any person or group of individuals with an interest in a business or are affected in some way by its goals, operations, or activities, or by the behavior of its members. It is therefore important for a business to clearly define the types of stakeholders that might be influenced by its existence and to determine ways in which to manage these relationships in both an influencial and ethical way. In the global arena, this has become particularly important, since there are now more stakeholders than ever before as a result of the sheer number of individuals and groups being affected by the practices and behaviors of businesses both on their home turf and internationally.

In defining the importance of these stakeholders, Johnson and Scholes (1993, p. 175) identified three aspects according to which the strategic manager would need to make judgments regarding stakeholder relations. The first of these is the likelihood of and level to which each stakeholder individual or group to impress its expectations on the company. This relates to stakeholder influence, which might be at a high or low level. An example of this could be a cultural group in China who might object to the manufacture of a certain product because of its perceived threat to local customs. Related to this is whether the group in question has the means of impressing its influence, and finally the likelihood of the current stakeholder expectations on future strategy. In the China situation, the company might need to consider product modification to more closely adhere to the local stakeholder requirement.

As mentioned, these considerations focus around the influence and power of stakeholders. According to Johnson and Scholes (1993, p. 176), influence can be derived from various sources, and can be exerted by various parties within the business relationship, including managers and stakeholders. From the management viewpoint, for example, influence can be a source of power emerging from the personal qualities of individual leaders. In groups, influence derives from a high level of consensus among several individuals in a group. In this way, a manager can use his or her personal influence to shape the consensus level of groups within the company to further the specific strategy of the company. Hence, companies can influence their stakeholders by means of persuading them to buy products, for example, or to maintain a sense of goodwill towards the company and influence others to invest in its products and services.

Stakeholders might exert their influence over a company, in turn, by means of various sources of power (Johnson and Scholes, 1993, p. 179). These include resource dependence, involvement in implementation, knowledge and skills critical to the company, and internal links to the company.

According to the authors, the importance of resource dependence is common among stakeholders who hold power that they can exert over companies. This is the ability of stakeholders to influence the provision or acquisition of resources. Involvement in implementation frequently requires a strong knowledge of customer requirements, which often dictates not only manufacturing, but also distribution. This means that manufacturing and distribution companies can influence each…[continue]

Cite This Essay:

"Stakeholders International Business The Business World Has" (2012, May 14) Retrieved October 23, 2016, from

"Stakeholders International Business The Business World Has" 14 May 2012. Web.23 October. 2016. <>

"Stakeholders International Business The Business World Has", 14 May 2012, Accessed.23 October. 2016,

Other Documents Pertaining To This Topic

  • International Management When Businesses Go International They

    International Management When businesses go international, they have to face a number of issues and challenges from their external environment. The international business environment is much more complex and multifaceted than local environment. Business organizations have to deal with a number of environmental forces that directly or indirectly affect their business operations. These forces include political forces, economic forces, social, cultural, and demographical factors, technological forces, and competitive forces (Loudon, Stevens,

  • Global Business Current Business Events

    The lack of process orchestration shows that IBM is failing to understand and manage the bargaining power of suppliers effectively. The core requirements of the project center on a series of healthcare professionals who taken together are the stakeholders of a complex payroll processing system (Paull, 2013). The requirements from a project management standpoint is to concentrate on the bargaining power of suppliers as system integration partners and create

  • Organization IBM Company Business To Business Is a Communication...

    Organization (IBM Company) Business-to-Business is a communication theory that aims at enhancing the effectiveness of the selling process. For the past decades, the cost of hiring skilled professionals has been on the rise than the cost of media, advertising, or price index of consumers. Collaborations conducted online have the potential to change how employees in a business work with clients and their colleagues. Looking at IBM, employees are often encouraged

  • Business Risks Overview of the Risk

    Business Risks -- Overview of the Risk Environment There are various types of business risks in the business environment, and these risks, of course, can differ from environment to environment depending on the type of business or organization. The severity and category of the risk also depends on the largeness of the organization and on various other factors, such as location, personality of employer, quantity of employees employed, and so forth

  • Business Intelligence Bi Plan Business

    Although intranet pages may provide links to the Internet, an intranet is not a site accessed by the general public" (Housel and Hom, 1999). Aside from the intranet, the company also uses a wide array of anti-virus programs, firewalls and virtual private networks. The scope of these software applications is that of screening the information which flows between all the organizational computers (Answers, 2011). At the level of the organization,

  • International Business Graduate Education

    This method is a descendant of a Rand Corporation study methodology changed from war planning and now applied to changing university curricula. It will produce changing and dynamic profiles as the needs arise for a study. It is a research technique with flexibility that has been used in a program at the University of Calgary to explore new concepts of the information systems body of knowledge in business. The Delphi

  • Business Theory Relationship Between Stakeholders

    As the proceedings of the past few years have shown, these labors, regrettably, have not prevented companies from engaging in unethical behaviors that lead to larger corporate disgraces. As a result there is augmented force to make accessible more structured power and ethics programs so that companies are more accountable to the societies in which they function. Understanding the setting of business ethics can be very difficult. The field is

Read Full Essay
Copyright 2016 . All Rights Reserved