Analyzing the Stakeholders and Ethics

Stakeholders and Ethics Stakeholders in an Organization Stakeholders are those individuals who have a stake, a claim or an interest in a company or organization. Such individuals get different types of rewards, such as organizational status, returns or power, because they contribute some sort of expertise, skill and/or knowledge to the organization. Dell Inc. is one of the biggest global tech corporations that build and sell PCs and computer related hardware.

In 1988, the organization changed its name to Dell Computer Corporation and tried selling its PCs through stores, a few years later, in 1990. The latter move was, however, unsuccessful and they reverted to selling their products directly to their clients. One of the key things that have ensured success for the company over the years, is their flexibility. The company strives to incorporate stakeholder and consumer feedback into its product design and innovation processes. This guarantees it, customer loyalty.

Through incorporating customer/stakeholder feedback into products, the company saves a lot of money and time, since it cuts or minimizes some steps in the R&D process. Another factor that has ensured success for the company is the fact that it motivates its staffs through different types of incentives, such as free training, which helps strengthen interpersonal, conceptual and technical capacities. Dell acknowledges the importance of stakeholders, and has an established stakeholder consultative group.

Dell defines stakeholders as persons who are experts on various material issues that affect the company, and who can engage in honest and effective discussions. The feedback, advice and guidance offered by the stakeholders, allow the company's corporate responsibility team to advice its leadership on its duties as a global citizen (Kanal, 2010). The Top Management Structure Companies are embedded in a hierarchical social structure that is driven by the needs or interests of its stakeholders. Companies exist because they can create value and deliver desired outcomes for stakeholders.

Stakeholders are classified into two main groups: internal and external. Successful organizations are those that satisfy the demands of both stakeholder groups. Stakeholders can number from a few dozens to thousands of individuals, thus they cannot all run the corporation. Instead, they delegate this authority to company executives. Stakeholders also have to observe ethics when dealing with each other, so as to ensure effective consultations and delivery of desired outcomes. Individual, professional and societal ethics, together, form organizational ethics.

An organization's leadership or its management can make sure that the organization is ethical by establishing an ethical culture -- complete with a structure and control system -- and backing the interests of all stakeholder groups. The troubles that faced Dell and its businesses show the negative effects that result when a company's top executives do not uphold high ethical standards. There is need for leaders to manage companies in an ethical manner, since customers rely on the honesty, integrity and ethics of organizations to make good products.

In the case of Dell, clients expected the company's managers to produce good computers. Therefore, if a company is known for its lack of ethics, its staffs can also be assumed to be unethical, since one would rationally believe that their conduct and behaviours were regulated by its code of ethics (Kanal, 2010). Even in cases where a company's unethical conduct was the result of a handful of employees, it will still be assumed that all employees were unethical.

Therefore, all employees have a responsibility to ensure that an organization creates value, and delivers desired outcomes, in an ethical manner, since any negative or unethical conduct would affect all individuals, and the firm at large. Organizations can face different types of challenges when trying to get the approval of their stakeholders. These challenges include: balancing between long-term and short-term goals, agreeing on how to apportion rewards between various stakeholder groups, and selecting which stakeholder goals to satisfy, and in which order.

All stakeholders can be encouraged to participate in company activities, if given incentives that surpass the contributions that they make to the organization. As mentioned before, incentives include: organizational status, power and money. Rewards allocation is vital, owing to the fact that it incentivizes stakeholders to contribute more towards an organization, hence improved employee productivity (Jones, 2013). Case Study about Sony When Sony started out, it was one of the world's largest, most innovative and best performing electronics firm.

However, as time went by, the company failed to meet some of its customer demands, allowing other electronics companies to eat into its market share. In late 2005, the company decided to change tact by appointing an American as its head. The new CEO was supposed to revitalize Sony through cutting production costs and reinventing the company's structures.

The company had decided to change tact not only because it had failed to meet customer demands, but also because it had experienced losses for several years and had not been as innovative as it was when it started out. Earlier when the company started, it was a trendsetter; the innovative nature of its products ensured that it had a competitive edge over its rivals. When the company stopped being innovative, its profits reduced.

Another factor behind the losses that the company experienced between 1995 and 2004 is that the company had gotten involved into too many businesses, most of which were unprofitable. Stringer, the new CEO, quickly got down to business and focused on moving some of Sony's divisions to low-wage countries, since the organization's immediate problem was that its operating costs were twice that of its competitors. The CEO also realized that many of the company's division managers were involved in power struggles that were hurting the company's finances.

Stringer opted for a strong, command-and-control approach, making it clear to the managers that they must stop squabbling, and start working on cost reductions. Soon after these decisions were made, the company started recording better financial results. Stringer further cemented the gains the company made, by restructuring the company's divisions and taking charge of its struggling electronics division. He also went ahead and retrenched some of the company's top managers, replacing them with more competent individuals (Jones, 2013).

Part b The success of a business is dependent on its ability to plan its future. The best master plan any organization could come up with is a competitive business strategy. Sony's CEO recognized that, to come up with an effective business strategy, one first has to scan both the.