Social Responsibility and Stakeholder Relationships

Summary

The article I read is about business and society, approach to social responsibility, and ethics written by Thorne Ferrell. The article talks of the social responsibility framework and in detail focuses on the relationship a business has with the external environment. It describes the meaningful advantages and applications of organizational social responsibility to a company and how it can be implemented. Chapter two is on the strategic management of the stakeholders’ relationships. The article discusses the roles the stakeholders play in the organization and how keeping a good organizational social responsibility can result in an impressive performance by an organization.

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Key Learning Points

After going through the article, I came to identify the following key learning points that enhance a detailed understanding of both proper reputation management and organizational social responsibility to a company.

  1. Understanding the responsibilities of an organization. This helps in identifying the stakeholders’ expectations from the organization and puts it in the best way to meet and accomplish them.
  2. Identifying the key stakeholders in an organization. For any business to excel, it has to identify the main stakeholders that it is working with. This encourages specialization and being agenda specific.
  3. Learning of the benefits of organizational social responsibility to fully appreciate and value the role it plays in any given organization.
  4. Means of building an effective relationship between the company and its stakeholders. The article has identified ways through which a company can establish an effective communication channel.
  5. The article has also taught me ways to handle crises. Most if not all companies at one time or another always go through crises, and identifying means through which they can be solved in a major area of concern.

Relevant Statements to the Session

It requires much time, dedication, and effort to brand and build a business name up to a desirable level. This, however, is not the most important part as businesses can always easily lose this trust with only a little mistake. Having a good reputation requires the employees and the management to work together in coming up with new ideas and mechanisms by which they can uphold this achievement. In addition to this, to perform at its peak any organization will always try to be at its best. A company that employs organizational social responsibility is always noted to be performing better as compared to those companies which are not practicing that. They are also always noted not portray great customer satisfaction, are always fast responding in cases where a crisis has arisen. The companies are also generally more successful and generate more profit.

Organizations should always establish channels through which they can collect customer feedback, offer a portal through which its employees can raise their problems and issues. In addition to this, the organizations should always ensure that they address the areas of concern that are raised by the employees and all other stakeholders. In the event of a failure of an organization to do so, there always arise cases of protesting, rejection of products or services and this can have very negative consequences to the organization. An organization should also be in a position to detect any rising cases of a crisis and be able to manage it exhaustively. They should also take measures to ensure that there is no re-emergence of the crisis. In the development of stakeholders, a relationship involves the development of trust and commitment amongst the organization and its stakeholders and the promotion of proper communication between the stakeholders and the organization.

Critical Analysis

The article, in both of its chapters, is discussing the role that keeping a strong organizational social responsibility can do to improve the productivity in an organization. It describes the main area of concern, including the establishment of a strong reputation between it and its major stakeholders. The article explains in detail the responsibilities that an organization is accountable for. These responsibilities include economic, philanthropic, social, ethical, and legal responsibilities. This implies that an organization does not only have to deal with its primary objective of economic responsibilities but also has to take into consideration its other responsibilities. In any given organization, the communication within it, among the employees, and with the stakeholders is a key area of concern. To perform at its best an organization has to ensure that there is satisfaction with the major stakeholders who ensure its day-to-day activities.

The employees, the customers, and the investors always need assurance from the key management to function appropriately. It is, therefore, essential for organizations to maintain a strong organizational social responsibility to win the trust of the stakeholders. Since reputation is a key element in marketing and product or service delivery, it is always essential for every organization to maintain a good reputation. It is one factor that is very tasking to build and fully establish but requires just a little mistake to destroy. An organization that upholds organizational social responsibility and which is engaged with the activities which accompany it is always found to perform better compared to those that do not practice it. When the stakeholders are given that feeling that they are a major part of the company’s decision-making process and that their opinion counts then they get motivated to work better. Employees always have their grievances, which always need to be addressed.

Creating a platform for them to raise these issues and be heard is an essential part of encouraging them to be motivated and work harder. Avoiding handling such cases can always result in dire consequences such as a rise in demonstration among the employees or poor production in terms of both quality and quantity. Other means which can be used to strengthen the commitment of the employees include the introduction of programs that are employees centered and also the introduction of plans which promote employee stock ownership. Customers are also a key area of consideration to take into account. They are the main people any organization is established to serve. Meeting a customer’s requirement and quality ensures free marketing for the product or services as they will share information with their friends and their other networks. This, however, can harm an organization if it produced a substandard service or product. Meeting the requirements of the customer is a key element in organizational social responsibility and, if well utilized can lead to improved production by the company.

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An investor is the other stakeholder that, according to the article is more affected by the way an organization runs its organizational social responsibility. Investors will only invest in a place where they are guaranteed profitability and also where there is trust.

The article also talks about the stakeholders, their orientations, and their main activities. These include information distribution in the firm, the creation of data on the stakeholder groups, and also the determination of an organization’s intelligence response. The article further identifies the major stakeholders and their responsibilities.

Another major part which the article talks of is the economic crisis and how companies react to them. The author has documented that the major benefits of social responsibility include the promotion of trust with the stakeholders since they feel they are made part of the organization. There is also a notably improved customer satisfaction as all their complaints are addressed and their opinions also counted. Social responsibility also ensures that the employees are fully committed to their work as there is the creation of favorable working conditions. At this level, they, therefore, perform better and, as a result, lead to great performances by the companies. The loyalty from the investor is also improved due to the transparency portrayed by the company. In addition to all these, these companies which practice organizational social responsibility always record more profits as compared to those that do not practice it. Organizational social responsibility is the only element that can hold together all the relationships within an organization. In cases where the loyalty from the employees was breached the companies suffered compromised service, compromised quality, and greatly reduced efficiency.

Among the most important practices in business in the current economy is the promotion of an effective relationship in a business. A good interrelation between the employees of a company promotes a very productive kind of organization. To establish this, an organization has to balance the perception and the need of the primary stakeholders. The relationship between the organization and the secondary stakeholders is also another key area that needs redress and that should be upheld. As they are the main reasons why any company or organization is started they should be dealt with keenly. These secondary stakeholders do not take part in any organizations from day to day activities. The main and essential means for improving the performance of a company is by motivating and encouraging them to work at their best level. In real life, situations motivated employees are always known to work at their best, and these results in high-value products in an organization. Employing this in an organization will ensure great success by that organization. Upholding a company’s values can also ensure that it, in the early stages can identify an emergent case of crisis.

The article also identifies the key attributes that an organization has and of which are automatically awarded. These attributes include power which can be used to impose a stakeholder’s opinion on a company or organization. They also award the assurance of the genuineness and consider them desirable and proper. They also have the power to exert pressure on the managers and organizations to get their things done.

The other area where most managers put more emphasis is in the development of proper communication between the organizations and other stakeholders who are connected to them. This ensures that there is a great understanding between them. The promotion of trust between them also enables smooth operations of their activities. The show of commitment between them is another major area that must be taken seriously. In the development of organizational social responsibility, both parties must be sharing the same common goals and also have trust among each other. These characteristics enable smooth transactions and processes but internally and externally. For a company or organization to implement a stakeholder’s opinion in an organizational social responsibility they have to go through several processes to verify their validity. The corporate culture must first of all be assessed to determine if it will be acceptable. Stakeholder groups should be identified. the issues raised by the stakeholders should as well be identified. Next, the organizational commitment to social responsibility should as well be studied and assessed. After this process, the organization should identify all the requirements and the resources that will be required for the implementation of the stakeholder perspective. they also need to determine the urgency by which the opinion should be put in place. The final part involves the stakeholder seeking feedback from the stakeholders.

From the article, it is evident that most companies and other organizations always put much of their focus on the financials line of production without considering other major inputs. During times of crisis, it has been found out that those companies which practice organizational social responsibility and which upheld this value could way before the crisis is in a position to identify a crisis possibility and are always in a position to help control the situation. It is also noted that companies that employ organizational social responsibility are always noted to be performing better as compared to those companies which are not practicing that. They are also always noted not portray great customer satisfaction, are always fast responding in cases where a crisis has arisen. The companies are also generally more successful and generate more profit. Organizations should always establish channels through which they can collect customer feedback, offer a portal through which its employees can raise their problems and issues. In addition to this, the organizations should always ensure that they address the areas of concern that are raised by the employees and all other stakeholders.

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In a real business situation, all the above discussed are very practical. Employees’ perception of their place of work always determines how they work in the company. If the working conditions are not very comfortable with them then most of the time the employees will tend to complain and as a result, spend several business hours just complaining among themselves. Their quality of production will also be compromised. The speed of production will also reduce as there will be no that passion in doing their delegated duties. In times of crisis such companies face greater problems because rather than the stakeholders coming up to join hands and help with the situation, they will be questioning the management. To help with this situation organizations should have in place a fully structured social responsibility with an uptight framework of members. Organizations should also value their stakeholders’ opinions in matters concerning the management of the organization. As a company’s reputation is a major area of concern, companies should be able to identify how they want their organization to be viewed by the stakeholders. They should also be able to determine how the stakeholders evaluate the organization and their impressions of its image. In addition to that, they should evaluate others’ impressions of organizational performance. There is also a need to understand the company’s general reputation.

Practical Implications

The companies found in the United Arab Emirates do not generally believe in the role or impact of organizational social responsibility. They are never much concerned about the relationship between the company and its stakeholders. Although most of the organizations in these areas have started understanding and adopting the use of organizational social responsibility most still do it just because it is a requirement by the Muslim community. The way the companies treat their employees does not encourage them to deliver their best to the production in the companies. Rather they always only work to get their salaries and to earn a living. During a crisis in this kind of organization, recovery is always a major issue, and most of these companies never make it back in line.

In my way of management, I would ensure that I create a good working environment for the employees. This would include giving them comfortable pay, providing protective working clothes and equipment, introducing medical coverage for employees in case of an accident while on duty. Other ways through which I would apply the subject matter would be by indulging the company in community environmental activities to improve the relation with the surrounding community. One way of improving the performance of a company is by motivating and encouraging them to work at their best level. Motivated employees always work at their peak, and this results in high-value products in an organization. Employing this in an organization will ensure great success by that organization. Upholding a company’s values can also ensure that it, in the early stages can identify an emergent case of crisis. Through this, they can also always be able to handle these cases early enough.

Learning Reflections

Any business has a mandate to build and uphold a strong relationship between it and its employees, customers, and any other stakeholder connected to them. To do this they have to lay down, step by step, all the necessary details that are required for a smooth relationship amongst them. Managers are supposed to brainstorm and come up with credential ways to ensure the success of these relationships. For this to happen, the company has to first of all establish a strong organizational social responsibility. Through this, the company 0or the organization can win the trust of its clients and customer, be supportive of their employees and be able to convince their investors of the success they are to gain by investing in the company.

All these take time and require every company to establish a strong way of managing their resources to enable the success of the company. I also learned that the stakeholders in any company, which include the employees, the investors, and the customers are also important to a company and have a strong role they play in making decisions, though indirectly to the company. The stakeholders can also in dire times exert pressure on the company so that they deliver as per the requirements of the stakeholders. The other major area of concern I came to learn about is the processes involved before any organization can implement any suggestion or recommendation by the stakeholders. The process involves the organization analyzing the recommendation, co-relating it to the companies’ values, evaluating its acceptability, and finally adopting or rejecting the recommendation. During a crisis, as I came to learn, a company needs to make very fast decisions and to come up with strong mechanisms and ideas to counter these crises.

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