Stakeholders/interest groups and the demands placed on business by each…
Stakeholders/interest groups and the demands placed on business by each groups
All businesses form part of a community or an online network in which it operates. The members of these communities or networks are the stakeholders of the business who, in one way or another are affected by the activities of the business
Stakeholders place pressure on the business and demand that the business acts in their interest.
Difficulty for a business is to weigh up the demands from the individual stakeholders and then to prioritize the order in which demands should be met. It is not possible to meet all stakeholders demand, because all businesses have limited resources available.
Stakeholders include employees,customers,shareholders, regulators, government, media, communities, suppliers, unions etc.
: shareholders, employees, suppliers, customers and competitors
: Direct interest in financial performance of business, because of capital contributed and it impact on the value of their investments
: Employees of the business at all levels have an interest in the financial performance of the business as this impact on their remuneration
: Suppliers(raw materials, capital goods, financial resources/banks) expect prompt payment from the business. This may be in conflict with the business interest of delaying payment to create a better cash flow and therefore extent that suppliers cannot survive financially
: Expect good quality products at a reasonable price. Being socially responsible towards consumers go way beyond this. e.g. the environmental impact on the dispose of packaging, products containing CFC'S(e.g. fridges) and car emission contributing to global warming.
: CSR towards competitors(businesses selling other brands/substitute products) will include not selling counterfeit goods. Businesses spend large amounts on developing successful products and to establish their brand as a quality product, when a brand becomes successful, may also become the target of counterfeiting activities. Business has responsibility to act in a manner that respects any of these belonging to a competitor
: Local community, the country as a whole and environment
: Government collects taxes from the businesses/employees in the formal sector and uses it to create infrastructure and environment that stimulates more business operations. In the interest of Government to create a tax system that can increase National Income levels to its max without overburdening business sector. Broader Government objectives of transformation-also prompted Government to address issue of SR through various pieces of legislation(South African constitution and Bill of Rights, Labor relations Act, BBBEE Act, employment equity Act , Skills Development Act, National Water Act and Occupational Health, Safety Act etc.
: Expects businesses to contribute to issues such as:
Ecological(green) control and nature conservation without harming local communities
Sponsorship for sports activities
The creation of infrastructure: Not only the responsibility of government but private sector has to contribute and SA has many e.g. PPP's(Private-Public-Partnerships)
Broad Based Black Economic Empowerment(BBBEE)
Upliftment of the poor through training and development initiatives such as ABET(Adult Basic Education and Training) to improve literacy rates.
Health and safety
AIDS prevention and treatment
Anti-drug abuse campaigns
Air(factory emissions) water(pollution by mines), noise pollution(especially near living areas) Government has policies and legislation in place to deal with these issues, but often lacks manpower to enforce with result-moral responsibility of corporate sector to act responsibly
Designing, implementing and reporting on an CSR program
A CSR programme should form part of the business's strategic plan and buy-in is critical-from top management to all employees
Buy-in at all levels will only take place if all internal stakeholders are aware of the value of CSR
When Csr becomes part of the core and the identity of the business and brand, then resources can e directed towards the successful implementation of a CSR programme
Some ideas for CSR programmes include:
Educate people on how to save energy and water
Better use of natural resources
Training employees and their families
Improved working conditions
Involvement in community activities. e.g. Health awareness or literacy programs