Manufacturing process Essay

?What are two items regarding the manufacturing process related to the organization that the team finds unique or interesting? One of the processes that we found interesting concerning the Coca Cola Company is that the company operates through multiple local channels. The operation is set-up to manufacture, sell concentrates, beverages bases and syrups with partnerships with within the local regions in the world. This occurs because Coca Cola is comprised of many bottling partners who manufacture, package merchandise, and distribute the final branded beverages through local customers and vending partners worldwide who then sell to their local consumers with in their region of distribution. This is a unique operation because most consumers would think that Coca Cola is located at one place of operation and distributed worldwide. Another unique aspect that we found interesting is that Coca Cola has a conservation process called Sustainable Packaging. This process starts with the company having and showing an active role with recovery and recycling process. One way they are in the forefront in this process is that they support and invest the placement of several thousand recycling bins in public areas every year. They also directly invested in six plastic bottle to bottle recycling plants around the world, these plants process millions of pounds of material each year. This process helps to produce new packaging along with other items within the company. These innovated conservation awareness processed has gain favorably and partnership with Ocean Conservation and Keep America BEAUTIFUL. These two process from producing the product to investing in conservation show the cradle to grave aspect of the Coca Cola Company.

Sensory Perception

Our senses nourish our brain like food feeds our body, without their input our brains would be very hollow and lacking of knowledge (Kirby & Goodpaster, 2007). For knowledge we heavily rely on what we perceive from our senses, as they provide first-hand experiences, giving us primary evidence on surroundings and situations. However human’s five senses touch, taste, sight, sound and smell also have their imitations, so therefore they each have weaknesses to the amount of accuracy of knowledge they can give. Starting from the sense of sight, a popular expression is â€Å"seeing is believing† as we depend on this sense to confirm reality. However beliefs from sight vary from person to person as we perceive things differently. An example of this would be the fact there was a time when people believed the earth was flat, as that was how it appeared as people could see the distant horizon as a straight line, it was only when the few thought otherwise went forth to prove against this knowledge that they were able to open new vistas of reality through their vision. Hearing, another sense has also been important for the use of human survival as a way of hearing unusual sounds that may stand for danger and for communication through language. However, human hearing can be limited, as often scientists find the existence or presence of sounds we cannot hear through our own ears. A human hearing deteriorates through age, as sensitivity towards sounds of higher frequency is lost. However our hearing is sophisticated enough that we can organize the sounds we hear, grouping and segregating these factors so in one aspect we hear what we want to hear. Sounds can also be interpreted or misinterpreted by different people as they stimulate varied emotions. As we generally connect the sounds we hear back to our memory, meaning we can recognize a person with a distinguishable voice. The sense of smell is important and is often used subconsciously for instinctual reasons. As recently discovered the extent to which the smell of a partner can affect our attraction to them. Our perceptions and evaluations others are influenced by their smell, as unpleasant smells connect to our disgusts or negative opinion of another. However, the perception of what is a good or bad smell can be interpreted differently between people as it is attached to previous knowledge gained. Knowledge, justification and critical thinking are three factors that contribute to the accuracy of sensory data (Mohanan, 2000). Critical thinking is the mental process of reflecting upon something to assess its credibility, truth, significance, usefulness, value or goodness on the basis of information available to us and a mode of justification that we consider legitimate. Critical thinking, knowledge and justification support the accuracy of information that our senses feed our brain. What we call knowledge is a collection of propositions that we believe to be true. A knowledge claim becomes part of the knowledge for an individual when the claim is accepted as true. Justification involves providing reasons for accepting propositions that we regards as knowledge, that is, for considering them to be true. It also involved providing reasons for rejecting the propositions that we regard as non-knowledge, considering them to be false. In other words, justification involves the defense of what we regards as true, and the refutation of what we regard as false. Observations, generalizations and theories are strategies of justification when using the senses as a viable way of gaining knowledge. Psychologists have long debated if perception is in fact due to nature or nurture. Beginning from the view point of nature, Gibson’s bottom up/direct theory that all the information we need to perceive is provided by our visual environment e. g. nature, rather than having to use past knowledge or experience (Mace, 2005). Additionally, Gibson and Gibson later proposed their Differentiation Theory which explains how the innate system develops. They suggested when young, we lack the ability to differentiate between objects. However, as we get older we develop the ability to differentiate, for this to take place all the necessary information needed is found is our visual environment. Next, from the view point that perception is a processes of nurture comes from Gregory’s top down/indirect theory which suggest that often the perceptual sensory data we receive is ambiguous and impoverished so perception often relies on the construction of sensory data, stored knowledge and expectations (McLeod, 2007). Research would suggest that although some argue that perception is due to nature, while other argues for nurture, it may in fact be that the two factors are interdependent and rely on each other. After all, it would be most adaptive to be born with some ‘hard wired systems’ which can be pruned and then developed to suit our environment. The human senses have enough strength to enable us to survive and develop our knowledge of our surrounding world to a point a point which we feel comfortable. Each sense has its limitations as well as its capability to be influenced by our inherited preferences, memories or previous knowledge. The senses an also be influenced by certain human states as tiredness, drug/alcohol abuse, nutritional deficiencies are all detrimental to the sensitivity of senses causing us to perceive something mistakenly. Our senses tell us similar things: through our different experiences in life we absorb the facts in different ways.

Btn 7 - Geiger

BTN 7-4 – Page 312 TO: Wendy Geiger DATE: June 19, 2011 SUBJECT: Manual Accounting Modifications for Expanded Business M E M O R A N D U M This memo is to advise you of the best possible ways for you to modify your current manual accounting system to accommodate the expanded business activities for your retail store. Pursuant to our conversation, you generally obtain your goods on credit using purchase orders, and your sales are primarily cash. You currently keep your manual accounting system using a general journal and a general ledger, and you make one summary entry for cash sales at the end of each business day. Due to increased demand for your products and higher sales volume, including credit sales, maintaining the accounting records has become time consuming, but you would like to continue with your manual system. Allow me to provide pertinent information that will assist you in continuing your manual system in the most efficient way. The accounting information system is one that collects and processes relevant data from transactions, and organizes them into relevant reports. This system is also used to report and record the exchange of goods and/or services. It is critical for you to understand how and what transactions are occurring in your business. A small business like yours can be effective with a manual process and with the use of special journals and subsidiary ledgers. With the issues you mentioned in mind, most of your transactions can be categorized into the special journals with the use of four individual journals to complement the general journal you are currently using. Special journals are used to record and post transactions, and are uniquely designed for each business, but for most merchandising companies, the journals used are sales journals, for recording sales on credit; cash receipts journals, to record sales made by cash; purchases journals, for recording goods obtained on credit; and cash disbursements journals, for recording payments made by cash. You are also able to use this format for your ledger. In order to understand special journals, it is necessary for you to understand that a subsidiary ledger is a list of detailed information on specific accounts of individuals with some commonality in the general ledger. One critical ledger is Accounts Receivable, which stores transactions of individual customers. This ledger will give relevant information on the individual customer, the date of purchase, the amount paid, and the amount owed. The other important ledger is Accounts Payable, which stores relevant data of individual suppliers. You would generate this ledger with similar information gleaned from my instructions regarding the Accounts Receivable ledger. These two ledgers are critical for recording your data, and they eliminate the need for posting same in the general ledger. The numbers at the bottom indicate the respective accounts delineated in your Chart of Accounts. You are already summarizing each cash sales at the end of each business day, but my advice would be for you to continue recording the daily sales and purchases because it is necessary for you to balance your subsidiary ledger with your general ledger. Daily reconciliation will enable you to track any and all discrepancies more easily. Total your sales journal accounts at the end of each month and this amount should be the amount in the debit column in the Accounts Receivable. Regarding the last column, you will find more consistency in your inventory system if you follow this procedure. I cannot stress the importance of proving the account balances in the general ledger and subsidiary ledgers periodically for accuracy after posting. You will first prepare a trial balance of the general ledger and confirm that all your debits are in balance with your credits. Additionally, Prepare a schedule of individual accounts and amounts. This is referred to as testing the subsidiary ledger. Generate a schedule of your customers accounts to show the balance owed. If everything balances, the accounts are assumed correct. This method of accounting information system might seem challenging to you at first, but I assure you that this is the most advantageous way for you to maintain your manual system. It is imperative you balance your journals and ledgers every day, without fail, to avoid any unnecessary discrepancies. The example I have provided should be a head start and I am always available if you need additional information, or if I can be of further

Effects of advertisement for childeren and youth Research Paper

Effects of advertisement for childeren and youth - Research Paper Example Unfortunately, while these are normally targeting adult’s children who often have unrestricted or unsupervised access to TV, this becomes collateral damage when exposed to the many sexually insinuative adverts out there. Take an example of Gucci it runs among others a commercial with a picture of a half-naked man with a woman on her knees at his feet in magazines accessible to children (Poulton, 2011). According to the longitudinal carried out in 2009 and presented to the pediatric societies, children exposure to sexual content on TV makes them more likely to become sexually active early and hence run a greater risk of sexually transmitted diseases (Morris, 2011). Moreover, another negative aspect of TV commercials on children is that they can encourage bad behaviors such as drug and alcohol abuse as well as violence. Camel cigarettes was under fire recently when a cigarette commercial was claimed to target teen age girls, in the one of the ads was a picture of a little, classic, black dress and fashion accessories, juxtaposed with a patent leather cigarette case. This could clearly have attracted the attention of teenage girls who would normally associate with the most of the aforementioned items (Boyles, n.d). This and such commercials others portraying violence and other conventionally antisocial behavior are likely to negatively influence children. Nonetheless, not all adverts are negative and several of them actually play an important role in informing and educating children on per tin tissues such as health and even sexuality. Condom adverts for instance are known to have a negative effect on teens, however, the upside is they provide information on safe sex, and this information is very important to keep help them protect themselves should they decide to have sex anyway. Ultimately, it is the collective duty of parents and TV and advertising firms to keep children safe form the adverts that

Human Resource Strategy Essay Example | Topics and Well Written Essays - 5000 words

Human Resource Strategy - Essay Example What is strategic human resource management? Strategic human resource management can be considered to be the capability of an organisation to ensure that it has the right mix of talent and skill in order to meet its business objectives (Armstrong and Baron, 2002, p. 42). Holbeche (2001, p. 13) highlights strategic human resource management as a ‘focus on implementing strategic change and growing the skill base of the organisation to ensure that the organisation can compete effectively in the future.’ SHRM involves the recognition of the internal intelligence available at all levels of the organisation and creating processes to draw upon this knowledge. Communication ‘is at the heart of these processes (Brewster, 2000, p. 153). The author discusses Mintzberg’s observation that strategy involves planning ahead of time and making changes to the plan on the basis of real world situations. The ability of an organisation to alter its course is dependent on the abi lity of the culture to allow for internal flexibility. SHRM then is an attempt to link organisational strategy with human resource management and drawing from this effort, makes an attempt to provide direction to the functional areas on HRM. Salaman, Storey and Billsbury (2005, p. 5) view SHRM as a ‘repository of ways in which academics, consultants†¦ think about ways to change organisations’. SHRM then is the key to how business is run and people managed. Huber and Glick (1995, p. 297) highlight the importance of facilitating organisational learning as a means to understand and adjust to changing business environments. Organisations that are designed to allow two-way information flow to ‘reflect cultural values and economic perspectives of top management’. This is of particular relevance in a multinational corporation. Ready and Conger (2007) reiterate the role of talent development in providing company’s the competitive edge to stay in the mar ketplace. They believe that companies that create ‘talent factories’ have the right mix of ‘functionality and vitality’ to fill key positions as and when the need arises. Storey (2007, p. 79-80) foresees a risk to the study of human resource management claiming to be a strategic function in the absence of a ‘robust analytical framework’. Terms like knowledge management have not been proven on grounds of efficacy in gearing the business up for change. The author suggests that some part of the responsibilities can as well be transferred to departments like marketing for managing the communications and the HR department relegated to the purely administrative practices of yore. The traditional role of HRM as policy maker to guide people management is incomplete without a conscious alignment to business goals. Strategic HRM aims to utilise the capabilities of the workforce towards a unified goal. The match between employee talent, employee goals and business goals is the key to successful work organisation. The necessary ingredients for an effective Strategic HRM process are the learning processes to facilitate future strategy development and adaptation to changes in the business environment. Who takes responsibility for strategic HRM? Ivancevich (2004, p. 48) recognises the role of the leader in laying the foundation for strategic HRM. Functional specialists provide the framework to carry out effective talent management processes; individual team heads determine

Cold War and Decolonization Annotated Bibliography

Cold War and Decolonization - Annotated Bibliography Example The friendship was created through various supports in terms of manpower, materials, and aids. However, such countries are said to have received no return for their support. In fact, as noted in the article, communist expansion to third world countries was a problem as acted as an impediment to the democratization process. On the other hand, there is argument that communist association with third world countries was as a result of competition with America and West European Liberal Capitalist. Also, America is said to have dominated in the international realm during this period. Therefore, the decolonization process was seen as a better way of controlling America dominance. The author also notes that rivalry that existed between communist and America was based on political economy. Also, the rivalry is noted to have affected the new emerging states. The states were faced with a dilemma on which side to support. This is seen to have created a chance for social awakening in post-war

Female Inmates (Corrections) Research Paper Example | Topics and Well Written Essays - 1750 words

Female Inmates (Corrections) - Research Paper Example This statistics are an increase of 10 to 64 female inmates per 100,000 female residents from 1977 to 2004. Even though the female arrest rate in US is less than that of male arrests rate, the growth rate of the female prisoners in US far exceeds that of the male inmates. Since 1985, United States of America has witnessed an average growth of 11.1 %, and this is relatively above the 7.6 % rise in the male inmates’ population. Currently, there are over 200,000 female inmates in the United States; this is a growth of over 800% over the three decades. The male population grew by 416% over the same period of time (CHRLR 14-18). Type of Women in Prison As noted above, the fastest growing segment of the United States prison population comprises of the women. The women held up in the prisons are due to variety of reasons. The offences committed by the females are diverse but a close examination of the women indicate that there are demographic and experiences common among the female offenders. Most of the women inmates are drug addicts who were involved in the drug addiction in order to escape from the life hardships and trauma faced by these women in their past life. The majority of these female inmates were arrested while acting as mules in the drug trade. Half of women in the national and state correction centres attest to have committed the crime they are incarcerated for under the influence of drugs or alcohol. From 1999 to 2008, the arrests of women due to cases rated to drug violation accounted for 19 % increase compared to a mere10 % increase for men. Many women in prison happen to have been involved in domestic violence in th eir lives and a common characteristic is that most of the female inmates are from poor backgrounds. It is worthy to note that nearly half of all women in prison are serving sentences for non violent offence and had been jailed in the past for a non violent offence. Two thirds of the female inmates had two or fewer convictions prior to the one they are serving. This indicates high rates of recidivism among the female inmates. According to Koon (5), the following experiences are common among the female inmates: Most of the female inmates are likely to have had a high school education. It’s also critical to understand that most of the female inmates are single; they have never been married or had a divorce. Most of the female prison inmates were arrested and convicted when they were unemployed. Physical abuse is also a common feature of the women in prisons; the inmates are likely to have experienced domestic violence or sexual abuse in their lives. The trauma could then have le d them to drug and alcohol, which then later led to their offences. As of 2004, the percentage of women in jail due to physical related consequences was 73% compared to 53% of men who had the history of sexual or physical abuse. Historical Treatment of Female Inmates Even though the rate of increase of the female inmates has remained to be higher than that of men, majority of inmates are male. This has led to prison programs being tailored to address the issues related or faced by the male prisoners and tends to overlook those faced by the female inmates. This is despite of various researches that show that female inmates face more stress and hardships in prisons unlike the male counterparts. Emotional stress due to family breakdown from their children often affects female inmates much more compared to the male inmates. The female prisoners have been discriminated and

Week 5 chapter 13-15 questions Assignment Example | Topics and Well Written Essays - 500 words

Week 5 chapter 13-15 questions - Assignment Example The origins of this concept is traced by to 1845 when journalist John OSullivan first used the United States Magazine, and Democratic Review, where he expressed the need to annex Texas to ensure the expansion of the American territorial boundaries. At the time, the journalist was reportedly protesting that England and France were meddling too much in the American affairs, something that he did not like. The term then grew in popularity and became a political word after that (Brands et al., 2012). The 1850s Compromise was the legislations that were proposed to help resolve the dispute that arose regarding slavery and the territorial boundaries just after the Mexican-American war. Some of the key provisions of the Compromise include the proposal that California be admitted as a free state to the Union. The second provision was that the part of Mexican that had not seceded be subdivided into two territories namely Utah and New Mexico and that these territories be free of slavery. Thirdly, the Compromise proposed complete abolition of the slave trade in the District of Colombia. Fourthly, the Compromise contained the Fugitive Slave Act, which required all Americans to assist the slaves that had returned. Lastly, the Compromise had a provision requiring Texas to give up parts of the western land which it had earlier claimed and received approximately $10 billion to help settle the national debt (Brands et al., 2012). Following the case of Dred Scott v. Sandford in which Scott sued for his freedom after the Missouri Compromise had prohibited slavery, Justice Taney ruled against Scott arguing that not American regardless of whether slave or free could be an American citizen. In fact, the judge continued to argue that Scott could still not have won even if he were to be a legal plaintiff. This ruling favored the sectionalism in the sense that it meant that slavery would still be practices in Missouri despite having been outlawed by the Compromise (Brands et al.,

The Educational Level of Leadership and Effectiveness of Thesis

The Educational Level of Leadership and Effectiveness of Organizational Change - Thesis Example In this regard, leaders responsible for planning and implementation of the change must be able to understand different factors of change and in situations where such an understanding is absent, organizations have been experiencing failures in the process of change. For this reason, the proposed research will be focusing on one of the major factors of organizational change, educational level of leadership, and subsequently, importance of educational and understanding level in the workforce as well (Williams et al, 2002). In specific, changes in organizations are observable in various forms, such as technological change, structural change, strategic change, and thus, these initiatives require a huge amount of effort for the success; however, lack of importance of educational level results in contrary results. In this regard, proposed research will be an attempt to identify and analyze different processes and procedures associated with the organizational change that will provide benefic ial outcomes to the business community. In addition, it is an observation that due to such a significant importance of organizational change, leaders do not only have the responsibility of carrying out the process of change in an organized manner. However, at the same time, they should continue the process of evaluation of management competency, and in other words, educational level of leadership, as well as the workforce that will be crucial to the success of changes in the organization (Poole, 2000). For this purpose, a primary area of focus for this research will be the relationship of an educated workforce from not only a competitive perspective for the organization, but also for those who find themselves on the receiving end of changes to their workplace. In addition, many leaders find themselves working with nothing more than a conceptualization of what the reorganizational development will look like, to developing and refining the concept into a plan of action and implementation. Moreover, leaders and managers expe rienced with organizational change may find it surprising of the failure rate of organizations that undertake change initiatives involving restructuring and reengineering efforts. ‘It is surprising that as much as eighty percent of organizations that undertake change initiatives fail at meeting their objectives’ (Black & Gregersen, 2008). This number is quite stunning. The challenge; however, is in determining reasons for this â€Å"failure† that will be the major part of the proposed research. In specific, without a solid foundation in understanding the approaches and ways of planning and analysis of change, and understanding application of the change-theory to an organization that is undergoing change, failure is a likely outcome (Williams et al, 2002). Thus, as with a company’s infrastructure involving its employees’ day-to-day function within its operations, and its relationship to competitiveness and profitability, a connection will be possible to the same employees and their educational level with their ability to work within the same constructs then add into the equation change

Should tobacco companies be held responsible for smoking-related Research Paper

Should tobacco companies be held responsible for smoking-related illnesses and deaths - Research Paper Example This is due to the fact that, whereas smokers inhale cigarette smoke directly into their lungs, those close to them eventually consume the smoke exhaled as well as that from the burning cigarette in a passive manner (Brandt 15). According to 2002 statistics, it is estimated that more than 1.6 billion people world wide are smokers, translating to approximately 27% of the world’s population (Torrison 82). The effects of this habit are numerous ranging from cancer, impotence, heart failure, and eventually death. It is estimated that more than 400000 people die on yearly basis in the US primarily due to complications arising from cigarette smoking (Torrison 17). This essay is a critical evaluation of whether tobacco processing industries should be held accountable for the deaths and other effects of smoking. Tobacco Smoking There is no person who is born a smoker, it is a habit that one adopts willingly maybe due to some reasons that most smokers give such as peer influence, as a way of relieving stress among others (Williams 51). Interestingly, information regarding the various harmful effects of this habit is usually within the vicinity of these people ranging from manufacturers warning printed on the cigarette packets, flyers and posters erected by various organizations which fight drug and alcohol abuse as well as numerous informative advertisements on the print and electronic media (Torrison 11). In this context, it would be wrong for these people to feign ignorance and put the blame on someone else. Majority of smokers know that tobacco smoking is addictive, meaning that the longer you continue to consume, the more you will program the body to expect frequent replenishment of nicotine. Probably, this is one of the major factors which make it difficult for one to quit smoking and when some do, the craving for nicotine becomes intense hence resulting to fallback and the show of withdrawal symptoms (Torrison 31). However, it is the responsibility of these people to know that it only requires effort and dedication in order to be able to quit successfully. If this is not possible, they have the option of acquiring the services of professionals, who would guide them through the process and advise them on how to manage the craving for cigarette until that time when they will have succeeded completely. The major problem is the fact that most of the smokers live in denial, i.e. they refuse to acknowledge that they are addicts some giving lame excuses such as they only smoke when on a drinking spree or when faced with a difficult situation (Williams 81). The US authorities have tried to enact legislations with the aim of protecting non-smokers from harm, with several states banning tobacco smoking in areas which are highly populated such as public vehicles, offices among others (Brandt 62). However, it is sad to note that even with these regulations smoking continues to be one of the major causes of death with statistics indicating that 1 of every 5 deaths in the US is as a result of this habit (Dethic 52). Some critics have in the past put the blame on cigarette manufacturing companies based on the assumption that if they were not in the business, then people would not access the cigarettes (Williams 124). They forget that tobacco as with other drugs, such as marijuana, is produced from plants, which any person can access especially since there are no laws that have been enacted to illegalize it. As such, one can just plant his or

Politics in Texas Essay Example for Free

Politics in Texas Essay The Texan republicans stand for the ideas of individualism. That entrepreneurship is the key to unlocking the powers of the economy, according to the Republican Party. The Democratic Party respects the notion of small business and entrepreneurship as it also strives to encourage jobs for hard-working laborers. In conjunction with this, the Democrats want businesses to be more flexible and technologically friendly, along with finding creative, environmentally-sound ways of promoting business. The Green Party also claims to support the power of the small business, but they have a more environmental approach that specifies several details in which companies should abide. In accordance with this, the Green Party wishes to limit free-trade in exchange with environmentally and labor friendly trade. They also specify a set wage that would allow an individual to afford a one-bedroom apartment on thirty-percent of their income. In opposition to a heavily regulated economy, the libertarians seem like the Republican Party, but to a more extreme. They are against most taxation, including income taxes since they define a wage or salary as a trade of money and service, not an equity. I believe this to be a proper point. How can people promote the economy when a chunk of their wages is taken by the government? The Libertarians are also opposed to the use of eminent domain which I agree with. It should not be up to the government to choose how someone’s property may or may not be used.

Agriculture Revolution Essay Example for Free

Agriculture Revolution Essay The agriculture revolution occurred in the Eighteenth Century. It was the age of new inventions and methods which caused agriculture to boom and end the long problem of famine. The agriculture revolution also caused social and economic consequences. What are some of these methods, inventions an also, the downfalls and consequences of the agriculture revolution? In the eighteenth century it was important to improve agriculture to feed the rapidly increasing population. This meant they needed to make inventions to grow more food at a more rapid rate. This is about the time when they discovered crop rotation, which is rotationing the crop to refurnish the nutrients in the soil by switching the crops that used the nutrients in the soil with the ones that replaced it. This system gave farmers the opportunity to farm all their land at all times, instead of having to let some land set for a long period of time. Some of the important crops were peas, beans, turnips, potatoes, clovers and grasses. Other inventions like the seed drill, threshing machine, along with the enclosure of fields helped produce enough food for the growing population. The enclosure of fields was a new invention, which took a farmers scattered land and put it together in fenced in fields to farm a lot smarter and more efficiently. Not all the people of the eighteenth century went to farming in this new style, they were used to the traditional style and preferred to continue farming that way. The Low Countries and England were the main people that used crop rotation. New crops made ideal feed for animals, which meant farmers could increase their herds, which ultimately meant more meat and better diets for all. Some downfalls of the agriculture revolution meant that if a farmer wanted to experiment with new methods they would have to get all landowners in the village to agree. Enclosure didn’t seem to help the poor rural families; this meant that they couldn’t do the things they traditionally did. They liked using common pastureland to graze stock, forests and marshlands for firewood and berries, therefore the poor highly opposed the idea of enclosure and created allies with the wealthy land owners. The wealthy land owners were also against enclosure, because it required large risks and investments? The agricultural revolution had a very big impact on women; the new inventions and the machinery were much harder for them to handle. This meant women had to find another role in society, working at Cottage Industries or as Domestic Servants. The agriculture revolution was the start of a great stepping stone. The new inventions like Crop Rotation and Enclosure helped form the age we live in today. There were ups and downs to the agricultural revolution, as there is in any new ideas that are trying to be implemented. The revolution ended famine, the methods used caused distress with the poor and even the wealthy at times; they also wanted to keep the traditional ways of farming. The transformation and experimentation of new crops and systems of crop rotation was not completed until the nineteenth century. Agricultural revolution allowed farms to be more compact and increased investments. The agricultural revolution was an essential prelude to the Industrial Revolution.

Strategies for Effective Succession Planning

Strategies for Effective Succession Planning Abstract Most managers know that talented people are hard to find. If managers try to replace current employees, they often find that recruiting comparably qualified employees from outside the company may cost much more than keeping current employees. Companies will face problems when employees retire and take with them the knowledge and experiences. Succession planning is about filling the organizations talent pipeline and building internal bench strength. This paper through qualitative analysis, literature research and inductive methods of analysis, based on this study constitute the framework of dissertation. In this paper I try to explain effective succession plans and how to institute a succession plan. By citing some cases of some popular companies to explain why companies need succession plans and how these plans affect companies. Succession plan helps to ensure leadership continuity in key positions, retain and develop future intellectual and knowledge capital. Companies may face seri ous human resources crisis. By writing this research paper I realize no matter I am an employee or employer, I should always consider the future. The world is changing fast, only if I prepare for the change in the future can I chase the pace of the world. Keyword: succession planning, continuity, replacement, effect, HR crisis Introduction More and more managers are complaining that they cannot find satisfied employees to fill the void in working positions. When some excellent employees leave their companies, its hard to recruit new employees who are competent to the jobs. In todays fast-paced world, organizations cant miss a beat, especially when it involves their people. The reason that these organizations are facing this dilemma is they dont prepare well for the future. Its a disaster when organizations cannot get the right people to replace the positions in time. However, some famous companies like Microsoft, Intel and Apple; they seldom face this kind of problem. Lets take a look at how these well-know corporations deal with this. Steve Jobs, the CEO of Apple, has always had to leave his job because his health state. Usually a company will be affected by the absence of its CEO. However, during his absence, Apple maintained operated smoothly and successfully. Even nobody has questioned: What will Apple do without Steve? Over the last 40 years, Intel has maintained a high level of growth and creation while it has transited through five CEOs. Paul Otellini, Intels current CEO, had been working at Intel for more than 30 years before becoming CEO, and his supervisors have devoted their whole careers time at this company. Innovation and predictability have become the characteristic of the Intel. On the other hand, the replacement of Bill Gates at Microsoft was a schemed case that cost Microsoft more than eight years to complete. The long-term strategy would give Microsoft a chance to absorb new managers into the management level and provide the guarantee which both customers and investors are looking for. (Douglas Welton, 2009) In fact, not only these companies, all the successful companies use a helpful tool to maintain high-quality continuity in leadership. This wonderful tool is calledsuccession planning, thats the key point why they can operate successfully all the time. Main body Background In previous years, labor in the United States was plentiful and taken for granted. Managers had lots of time to evaluate and prepare employees for advancement over long time spans and to overstaff as insurance against surprise losses in key positions. That was true in that time because most jobs did not require comprehensive prequalification. Seniority (sometimes called job tenure), as measured by time with an organization or in an industry, was sufficient to ensure advancement. Succession planning and management activities mainly concentrated on leaders at the peak of tall organizational hierarchies because organizations were controlled from the top down and were thus heavily dependent on the knowledge, skills, and attitudes of top management. However, as time changed, few organizations have the luxury to overstaff in the face of drastic global competition from low-cost labor abroad and economic restructuring efforts. That is particularly true in high-technology companies where several months experience may be the equivalent of a years work in a more stable industry. At the same time, products, markets, and management activities have grown more complex. Many jobs now require extensive prequalification, both inside and outside organizations. Its not just for positions, leadership competency have become important factors fewer employees compete for diminishing advancement opportunities. As employee authority has broadened the extend of decision makers, leadership influence can be exerted at all hierarchical levels rather than limited to those few granted authority by virtue of their lofty titles and managerial positions. (William J. Rothwell, 2010) Unfortunately, United States is facing a demographic crisis. From these two charts of US population by age, we can see from 1965-2025, people who are 55 or older is the most fast growing group and they make up the main population of US, Whereas the population of other groups is maintaining nearly the same. Baby Boomers started leaving their positions in 2008. Its supposed that Gen X will replace Baby Boomers positions. However, the population of Gen X is much smaller than Baby Boomers; most of them are too young to be qualified to some managing positions, so Gen X cannot fill the void which results from Boomers leaving. The average retirement age in US was 62; it means the number of people who are not working is becoming larger. From 2010 the growth rate of labor force will fall dramatically from 12% to 2%. Projected labor force change by age shows huge hole in future workforce. What happens to work force if more and more employees are retiring with a low growth rate of work force? Definitely it results in a shrinking pool in workforce. Its a bad news to companies because they will suffer a lot if they cannot find the right person to fill the positions in time, especially when some skillful and experienced senior managers leave or retire from companies. For these reasons, organizational leaders must take proactive steps to plan for future talent needs at all levels and implement programs designed to ensure that the right people are available for the right jobs in the right places and at the right times to get the right results. The continuity of the organization over time requires a succession of persons to fill key positions. The best way to find talented individuals to fill roles in your organization is not the typical system of placing ads, making calls, and looking for individuals who might be unhappy in their current positions, and trying to do this during the two-week notice period of a departing employee is not going to help to find the best person for the position. (William J. Rothwell, 2010) Thats where succession planning comes in. Whats succession planning? Succession planning is a process for identifying and developing internal people with the potential to fill key leadership positions in the company. Succession planning increases the availability of experienced and skillful employees that are hopeful to undertake these roles as they become available. This process focuses on seeking the right person, not just the available person. Its built on the idea of recognizing the potential leaders in organization and developing them so that they are ready to move up when the opportunity arises. Its one of the best methods to promote recruitment and retention in organization. Although people often mix up replacement plans and succession planning, the latter goes beyond former planning because its focus is larger than one position or department. While often related to planning for senior executive replacements only, it is really broader than that can extend as far down the organization chart as managers want to go. It also differs from replacement planning because successors are considered by level on the organization chart. A talent pool is identified based on each level of management and a typical goal is to prepare as many successors as possible to be 80 percent ready for promotion to any position at the next level on the organization chart. The remaining 20 percent of development is provided when individuals have been promoted to higher level responsibility. Succession planning is usually based on the assumptions that: A goal is to identify a talent pool of many people who are willing to be considered for promotion and work to be developed for it. The future may not be like the past, and the competencies required at each level may be different in the future so that merely cloning past leaders is not appropriate. Development occurs primarily on the job rather than by off-the-job training experiences. (William J. Rothwell, 2007) Why succession planning matters? Some people question whether its worth to spend time and money on succession planning. They argue that, with many people losing their jobs and working below their skill level, it should be easy to find satisfied replacements for the reduced number of people who can afford to retire at a time that retirement funds with the stock market. But that thought is not true. The people who leave their work do not match perfectly to the people who will be replaced as retirements or job growth. For example, the job growth in health cares. How many workers leave from information technology can become accountants? The fact is that succession planning is needs whenever in good and bad situations. Organizations should consider the future; they should plan for change in the future. Competition for the talents is tend to be more and more intense, just rely on the external human resources will delay the development of organization. They should focus on the internal human resources planning to maximize the advantage of companys value. Succession planning is critical to the business because the high-potential employees will one day become the leaders of the Company. This is why they need to be provided with opportunities to learn widely in organizations. These candidates should also be trained to widen their experiences to look into the working environment so that they can get a good understand of what are they expected to be to remain successful. Another reason its important is the candidates recognized in the plan will eventually bear the responsibility for assuring the company is capable of meeting future challenges. These high potential candidates must be carefully selected and then provided training and development that gives them skills and competencies needed for tomorrows business environment.( Tom Bartridge,2005) It helps to improve employees commitment and retention, by given the opportunity to become high-potential leaders, employees will become more active in engaging the planning. To meet the career development expectations of existing employees, they will work harder to get the chance. The world is changing fast; the knowledge is exploding every day, so as the marketing organizations face. What is important today may become inferior next month. Organizations will be in trouble without plans for future change. To meet the responding flexibly to change, a succession plan is necessary. Succession planning does not belong to big companies only. Small business like family-owned firms also needs it. Succession planning is an important component of any business strategy process. Family-owned firms make 80% to 90% of all United States business, yet only 3% of all family businesses survive beyond the third generation. Succession planning will aid the business owners in preparing for the time when they arrive retire, addressing extreme matters such as illness or death, securing the survival of the business through the transition of ownership, maximizing the return of the retiring owners investment and minimizing tax burden at transfer. Succession planning process Now lets look at one of the most famous business leaders, Jack Welch, who started his working at General Electric in 1960. As he raised his position in the organization he displayed leadership qualities that distinguished him from his peers. What did Jack Welch think about succession planning? One of his most admired skills was the ability to develop his subordinates so there was always someone ready to take his place when Jack was offered a promotion. How successful was his strategy? In 1981 he became the CEO of General Electric and served in that position until he retired in 2000. Furthermore, in 1991, Jack Welch stated: From now on, choosing my successor is the most important decision Ill make. It occupies a considerable amount of thought almost every day. Thats a very strong statement for someone who owns the prospective and leadership competency to increase the value of General Electric from $13 billion to $410 billion dollars during his tenure. Its clear that succession planning and development of future leaders does not exist lonely. It needs to reflect the companys strategic goal. For any organizations to implement an effective succession plan, a number of key issues that need to be considered: The succession planning program must have the support and backing of the companys senior level management. Identify what skills the organization will need in 5, 10 or 15 years. Identify high-performers that are almost ready to step into those critical positions. Analyze the workforce and identify who will be eligible for retirement within the next Critical positions must be identified and included in the Companys succession planning program. Succession planning must be part of an integrated HR process that includes training, development and performance appraisal. A system for communicating succession planning information to managers must be established. Managers need to identify the responsibilities, skills and competencies that will be needed by their replacements. A systematic approach for identifying, nominating and selecting potential successors must be established. Background information on potential successors, such as education, experience, skills, appraisals and potential should be reviewed. The training and development requirements of potential successors need to be determined. The skills of potential successors must be developed through work experiences, job rotation, projects and other challenging assignments. A system for monitoring candidates development plan progress by senior management should be established. Succession planning must include a system for providing feedback and encouragement to potential successors. Succession planning is basically a numbers game that requires good organizational skills and the ability to pay attention to details. Finally, the succession plan must belong to the organization and not to the HR department in order to make sure it has the attention it deserves.( Tom Bartridge, 2005) Any succession planning will be organized to integrate all its components and emphasizes the internal development of existing employees in the organization. (Rothwell, 2005a) A succession planning starts from preparation. The first priority in the preparation is deciding members of succession planning team. This group will determine the scope of the entire project by formulating how many levels of management will be concluded. Here is an overview of the basic steps of the succession planning process: Preparation Get commitment Assess the organization. Determine key positions. Identify competencies for key positions. Identify and assess candidates. Create development plans. Measure, monitor, report, and revise. Preparation A succession planning starts from preparation. The first priority in the preparation is deciding members of succession planning team. This group will determine the scope of the entire project by formulating how many levels of management will be concluded. Get commitment No succession planning program can operate without managers and employees at all levels totally understanding why a succession program is needed. At the same time, executives, managers, supervisors and employees must clearly understand their role in the program. Organization should also link strategic and workforce planning decisions connect succession planning to the needs and interests of senior leaders. (William J. Rothwell, 2007) Assess the organization During this step, constitutors should assess current problems and practices or organization, whats situation around organization and analyze the strength, weakness, opportunity and threat (SWOT) of organization. Whats more, they will analyze present work requirements and individual performance to get overview of organization. Determine key positions. Decisions makers should analyze the gaps by determining current supply and anticipated demand. They should check whether the positions arrangement is reasonable and what modification should be done to make the operation more efficient. At the same time, future conditions should be considered, whether the organization needs some new positions to meet the changes in the future. Identify competencies for key positions. In this stage decision makers identify core competencies and technical competency requirements of those key positions, they align the organizations strategic objectives with the work and competencies need to realize those objectives. At the same time, they will identify the future work requirements and individual potential. The future will not necessarily be like the past. The organizations future requirements should be driven down to each level, job and function. The result should be expected future job descriptions and future competency models. Identify and assess candidates. Firstly, HR audits develop a pool of high potential candidates based on the requirements of positions, and then managers identify some high potential successors and their developmental needs. After observing their working for periods of time, their supervisors will evaluate those potentials. The candidates for promotion to higher level responsibilities should be considered against the background of the future. In other words, every individual who wants promotion is really working to be developed on an escalator because the competitive environment within which the organization performs is not static. Things are changing as individuals are being developed. It is not enough to suppose that successful performance in the past will make sure successful performance in the future. Instead, decision makers should find impersonal ways to determine how well potentials will perform at a future time or at a higher level of management. Create development plans To better help candidates improve themselves to make them qualified to the higher level positions; organizations should create development plans for them. This step focuses on closing developmental gaps found by previous step. To carry out this step successfully, managers should establish an individual development plan for each employee to narrow gaps between what the individual does now and what he or she must do successfully in the future to function at higher levels of responsibility. An individual development plan is like a learning contract. It is usually completed between an individual and supervisor. Candidates are inspired to take advantages of resources to help them build the competencies they need at higher levels of management. Resources may consist of training courses inside the organization, seminars or conferences outside the organization, internal job rotation experiences, and many other competency building efforts. (William J. Rothwell, 2007) Different plans apply to different level, job and function. Candidates should be given opportunities to express themselves. Not just tell them what to do, let them deal with problems by themselves to train them how to be a manager in the future. Measure, monitor, report, and revise The results of a succession planning program can be evaluated by measuring program success against the objectives established for the program in step B. By tracking selections from talent pools, listening to leader feedback on success of internal talent and internal hires, analyzing satisfaction surveys from customers, employees, and stakeholders and assessing response to changing requirements and needs. E. How succession planning works in hospitality Average turnover rate in hospitality industry ranges between 50-400% for employees and 25-200% for managers annually. Its pretty high when compared to other industries. For instance, in the electronics industry (well- known for its high turnover) the rate of turnover is only about 27%. High turnover rate is accompanied by high turnover cost; hotels have to spend a lot of money on recruiting new employees and managers, not to say the lose results from vacancies before the new candidates are selected. The profound changes that have occurred in the hospitality industry and the implications of these changes have affected the ways the hospitality industry hires, develops, and retains employees. It is critical for any hotels to pay attention on the aspect of hospitality human resources: managing the organizations human capital and retaining its professional employees. There are many departments in a hotel to satisfy different demands of customers. For example, front desk, food and wine, housekeeping and finance department they are all necessary to a hotel and any of them fail to operate properly will interrupt the integral organization. To avoid this kind of human resource crisis, succession planning is necessary to hospitality industry. A good succession planning in a hotel should develop different plans for different departments. The function and work of each department is distinctive, so plans makers should focus on each departments characteristic. When designing the talent pool for each department, decision makers should not forget the cross training. Cross training can provide hotels human resource backup to prepare for the peak season. Conclusion Succession planning is not something a good company can ignore because the consequences of not being prepared to replace key personnel will have a major impact on an organizations ability to achieve its goals and strategic targets. The succession planning process needs to be considered as part of the companys strategic planning process because it deals with projecting future changes by anticipating management vacancies and then determining how to meet these challenges. (William J. Rothwell, 2007) When it comes to hospitality people have to talk about the employees. Employees are the most important part of hotels operation. They have the strongest effects on customers who decide the success or failure of hotels. A succession planning is here to provide hotels with continuous talent pool to keep hotels run successfully and progressive. Succession planning should be approached with same conscientious objectives that one would benefit the management of any valuable asset. Retirement fund assets are invested in different vehicles depending upon an individuals appetite for risk. Investment yields are tracked. Investment strategies are modified when results do not meet expectations. Retirement fund managers are kept or fired based on portfolio results. Succession planning efforts should be managed similarly. Create a strict structure to gather assessment information, articulate goals, track progress and evaluate results. In this context, the people who should be at the top of your organization in the future will emerge as stars. (Richard Houston, 2007)

A Womens Perspective of the Civil War Essay -- Women in the Civil War

For a long time, the Civil War was the most glorified and â€Å"cleaned for the purpose of propaganda† conflict in world history. The war was fought between celebrated generals Robert E. Lee and Ulysses S. Grant, whose armies fought for grand and noble principles and were never guilty of any of the heinous war crimes perpetrated by other armies. The inclination to depict the Civil War in this glorified manner strengthened over time until the process of converting the Civil War from hell on earth to a sacred cause systematically destroyed the anguish that the war created. The war the women on both sides of the conflict experienced underwent a comparable change because it reminded the victims of their suffering. Unfortunately, some historians have been too worried about correcting the evils committed against women during the Civil War to look at the reasons why the war and its suffering have been sanitized. Focusing on the woman’s point of view during the Civil War, espec ially the African American woman’s point of view, meant focusing on misery. By removing women from the overall picture of the Civil War, historians could ignore the misery and create a more affirmative representation of the Civil War. Until recently, the most basic historiographies of Civil War women were made of three parts. These included Northern women and the lasting consequences of their participation in the Civil War; Southern women, their encouragement or non-encouragement of the Confederate government and military, and their responsibility for the advancement of the Lost Cause; and African American women, whose experiences were a bit difficult to describe for lack of personal accounts. In 1938, in Women’s Life and Work in the Southern Colonies – one of the... ...Chicago: University of Chicago Press, 1970. Silber, Nina. Gender and the Sectional Conflict. Chapel Hill, NC: Univ. of North Carolina Press, 2008. Spruill, Julia Cherry. Women's Life and Work in the Southern Colonies. Chapel Hill, NC: Univ. of North Carolina Press, 1938. Baker, Jean H. "Reviews of Books: United States." American Historical Review 102 (1997): 191-2. DeCredico, Mary A. "Scarlett Doesn't Live Here Anymore." The Alabama Review 56 (2003): 65-67. Fox-Genovese, Elizabeth. "Rich White Southern Women." Nation 236 (1983): 370-2. Matthews, Jean. "Adam's Rib." Canadian Review of American Studies 2 (1971): 114-124. "Recommended Reading for CWTI Elementary Program Participants." Colonial Williamsburg. http://www.colonialwilliamsburg.com/History/teaching/TIParticipantGuide/Images/Recommended_Reading_Elementary_11.pdf (accessed October 17, 2011).

Barbara Andersons First Fieldwork Essay example -- Barbara Anderson A

Barbara Anderson's First Fieldwork Prà ©cis: â€Å"First Fieldwork† 1. Where did Barbara Anderson’s fieldwork take place and what was the goal of her research? Barbara Anderson’s fieldwork took place in the fishing village of Taarnby, Denmark on the island of Amager in the Oresund in the 50’s. The goal of her research was to publish the unseen side of fieldwork. She wanted to share the personal and professional sides of fieldwork with the reader. She went to the island to help her husband study culture change. 2. Who accompanied Anderson to her field site? Barbara Anderson’s husband (Thor), her daughter (Katie; 5yrs old), and Anderson’s unborn child (Sarah) accompanied her to her field site. 3. Why was Anderson’s incompetence with language and household skills both a problem and a blessing for her work in Taarnby? Anderson’s incompetence with language and household problems were due to the translation and understanding of a new culture. Barbara’s confusion of flour with sugar caused her meat loaf to be a disaster. The two words were very similar in Denmark. She also failed to understand the use of a timer. Her incompetence was a blessing because it showed she couldn’t be a threat to the community. The chief pilot’s wife, who had eluded attempts of an interview, agreed to one and also offered personal cooking lessons. 4. Explain how Barbara became â€Å"immersed† in Danish culture in the bathhouse. Due to her lack of the language she had to unknowingly â€Å"div...

Motivation in the Workplace Essay -- Business Management Papers

Motivation in the Workplace There are people out there in the workforce that believe they are obligated to do their best at their job simply because that is what is expected from all of us as humans. On the other hand, there are those out there that want to only do as much as they can get away with doing. No matter which one of these employees you are or are working with companies and employer's need to understand the concept of motivation. Motivation comes in many forms such as money, benefits, or simple recognition within. Motivation also leads to higher productivity and profit and that is what we are all looking for in business. The key to unlocking peak performance from your work force is the concept of human motivation. In addition, the key to motivation revolves around one fundamental principle: "What's in it for me?" (WIIFM). We have all been socialized to believe that only "selfish" people consider "What's in store for me." When in reality all people are motivated first by self-interest. The word selfish is used as a negative label for someone's perceived behavior. Understanding the concept of self-interest is perhaps the only way we will understand our need to achieve. Self-interest or feeling good about your self is a fundamental ingredient of motivation. When you work an extra hour, not on the clock, you are doing it for one real reason. It makes you feel good to either get the job done well or to help someone else. In the end you might get some sort of recognition in the company but usually you will not stay an hour extra today to get a gold star in two weeks from now. Dr. Gerald Kushel, has stated in his book "Reaching the Peak Performance Zone"; there are several variables involved in motivation. Among them are... ...hatever the motivational techniques used, they should be customized to coincide with the corporate culture unique to the organization. They also need to be meaningful to the employees and used in ways that the purpose of the reward is obvious. There are all kinds of employees out there with different work ethics and a small amount of thought into the motivational techniques used by an organization can go a long way to getting those unique individuals working together in a more productive and profitable way. Bibliography Works Cited 1. Eye, David E.,1,001 Ways to Inspire 1999 New York Publishing 2. Newman, Dr. Fred, Let's Develop 1994 Castillo International, Inc. 3. Sherman, Arthur W., Managing Human Resources 1998 (11th ed.) South-Western Publishing 4. Traynor, William J., Opportunities in Human Resource Management Careers 1997 VGM Career Horizons

Rob Parson at Morgan Stanley

Striking the Balance of High-performance and High-value Rob Parson, a young banker with strong relationships with the important players and a proven track record in the financial services, made significant gains in building Morgan Stanley’s reputation and revenues in the financial services sector (â€Å"Rob Parson,† pp. 90, 93). He has thorough marketing and product knowledge, approaches and works with clients brilliantly, and pursues the business aggressively and successfully (â€Å"Rob Parson,† pp. 95, 96, 97). However, from the 360-degree evaluation, his â€Å"soft skills† do not appear to be as strong as his technical ones. He needs to improve his interpersonal skills, respect and trust his colleagues, and adapt to Morgan Stanley’s organizational culture (â€Å"Rob Parson†, pp. 87, 93). Being a high performer, should Parson be promoted to Managing Director? I think not. First of all, Managing Director needs to command respect for knowledge and insight among people both inside and outside the firm (â€Å"Rob Parson†, p 102). From the evaluation, instead of being open to others’ ideas, Parson always thinks that he has the right answer (â€Å"Rob Parson†, p 91). Second, Managing Director needs to acquire highly developed organization skills (‘Rob Parson†, p 102). Contrary to the average score of 3. 80 for professional skills, Parson was scored at only 3. 13 for his management skills (â€Å"Rob Parson†, p 100). Without competent management skills, Parson will have difficulty communicating with, motivating and empowering employees. Thirdly, the ability to articulate departmental visions and strategies is an important responsibility of managing director (‘Rob Parson†, p 102). Coming from smaller investment banks, Parson kept the same work style, which conflicted with Morgan Stanley’s culture and norms(‘Rob Parson†, p 91). He will not lead a good example to employees in demonstrating Morgan Stanley’s vision and strategy. In many organizations, there are high performers like Parson who works great as an individual, but does not fit well in the organization’s value system. Both performance and value are critical factors for the health of an organization. What are some of the ways to strike the balance between the two? First of all, enhance performance by aligning organizational value with employee’s goals. When Rob Parson was invited by Paul Nasr to join Morgan Stanley, he accepted the offer primarily because he wanted to work with Nasr, not because that he would be a good fit with Morgan Stanley’s culture (â€Å"Rob Parson†, p 90). Before long, conflicts will surface and a series of problems will occur. How to minimize the misalignment? The organization needs to clearly communicate its mission and vision statement to its employees. Then employees should be encouraged to find similarities of their goals and the statement. If a gap exists, managers can work with employees to identify key characteristics of the two and find a common ground. In Parson’s case, because his personal vision is not aligned with Morgan Stanley’s, he faced problems when working with other colleagues and got frustrated by not understanding what he did wrong (â€Å"Rob Parson†, p 92). If his goals had been aligned with Morgan Stanley’s, he would have had a more effective working relationship and without doubt, his performance would have been greatly enhanced. Second way to achieve the balance is to drive organizational value through sustained performance. Assessing employees’ skills, investing on training programs and fostering an environment for continuous improvement are strategies for a sustained performance. Rob Parson may not be ready to be promoted to Managing Director, but inevitably, he has great potentials. What steps should be taken to make Parson a more effective leader? do something to utilize RP’s energetic, entrepreneurial nature that organ Stanley needed to penetrate the sector? _ First, I recommend that Nasr provide Parson constructive feedback and coaching. Nasr was worried about the potential risk of losing him(â€Å" Rob Parson†, p92), but if conducted in an effective way, feedback can help Parson understand more about himself and others, while coaching can help him reflect on discoveries from the feedback and make action plans for improvement. The existing 360-degree evaluation has provided factual basis, and Nasr can work together with Parson to explore unconscious mind behind certain behaviors and discuss what impact these behaviors had on others. Second, align Parson’s goals with Morgan Stanley’s vision. Before he went to work at Morgan Stanley, Parson knew that he was not the typical Morgan Stanley type (â€Å"Rob Parson†, p 90), however, one does not have to be one particular type to share the same vision with the organization. I recommend that Nasr sit down with Parson, go over Parson’s personal goals, and help him identify common theme with Morgan Stanley’s vision. The more aligned Parson’s goal is with Morgan Stanley’s, the more Parsons will feel being part of the team. Parson brings Morgan Stanley experience and talent in an area it needs improvement, and Morgan Stanley provides Parson the platform to utilize his skills and expand career horizon. The link between Parson’s goals and Morgan Stanley’s vision will help Parson take ownership of Morgan Stanley’s vision greatly. Thirdly, I recommend forming a knowledge sharing community in Capital Market Services. Parson was consistently commended for his strong marketing knowledge and relationship management skills (â€Å"Rob Parson†, pp 95, 96, 97), both of which many employees lack. Other employees also have valuable experiences from different functions, which Larson was not open to listen before. â₠¬Å"Lessons learned† and â€Å"Lunch and Learn† can both be examples of implementing the knowledge sharing. Gathering collective expertise and wisdom from employees will bring team closer, and add value to achieve Morgan Stanley’s goal of becoming the world’s best investment bank (â€Å"Rob Parson†, p87). The process knowledge exchange will provide Parson more opportunities to interact with colleagues in a different environment, where everyone’s goals are aligned to enrich their knowledge base. First of all, get his buy-in of Morgan Stanley’s culture. Before he went to work at Morgan Stanley, Parson knew that he was not the typical Morgan Stanley type (â€Å"Rob Parson†, p 90). I recommend that Nasr sit down with Parson, go over Parson’s personal goals, and help him identify common theme with Morgan Stanley’s vision. The more aligned Parson’s goal is with Morgan Stanley’s, the more Parson will feel be in the team. Second, I recommend that Nasr conduct feedback session between him and his peers, encourage conversation to discuss conflicts and observations. Use this as an opportunity to increase the openness and appreciation of new style and idea among the team as well. To learn and understand more about each other, May be used as an opportunity to create synergy. Rob Parson at Morgan Stanley Striking the Balance of High-performance and High-value Rob Parson, a young banker with strong relationships with the important players and a proven track record in the financial services, made significant gains in building Morgan Stanley’s reputation and revenues in the financial services sector (â€Å"Rob Parson,† pp. 90, 93). He has thorough marketing and product knowledge, approaches and works with clients brilliantly, and pursues the business aggressively and successfully (â€Å"Rob Parson,† pp. 95, 96, 97). However, from the 360-degree evaluation, his â€Å"soft skills† do not appear to be as strong as his technical ones. He needs to improve his interpersonal skills, respect and trust his colleagues, and adapt to Morgan Stanley’s organizational culture (â€Å"Rob Parson†, pp. 87, 93). Being a high performer, should Parson be promoted to Managing Director? I think not. First of all, Managing Director needs to command respect for knowledge and insight among people both inside and outside the firm (â€Å"Rob Parson†, p 102). From the evaluation, instead of being open to others’ ideas, Parson always thinks that he has the right answer (â€Å"Rob Parson†, p 91). Second, Managing Director needs to acquire highly developed organization skills (‘Rob Parson†, p 102). Contrary to the average score of 3. 80 for professional skills, Parson was scored at only 3. 13 for his management skills (â€Å"Rob Parson†, p 100). Without competent management skills, Parson will have difficulty communicating with, motivating and empowering employees. Thirdly, the ability to articulate departmental visions and strategies is an important responsibility of managing director (‘Rob Parson†, p 102). Coming from smaller investment banks, Parson kept the same work style, which conflicted with Morgan Stanley’s culture and norms(‘Rob Parson†, p 91). He will not lead a good example to employees in demonstrating Morgan Stanley’s vision and strategy. In many organizations, there are high performers like Parson who works great as an individual, but does not fit well in the organization’s value system. Both performance and value are critical factors for the health of an organization. What are some of the ways to strike the balance between the two? First of all, enhance performance by aligning organizational value with employee’s goals. When Rob Parson was invited by Paul Nasr to join Morgan Stanley, he accepted the offer primarily because he wanted to work with Nasr, not because that he would be a good fit with Morgan Stanley’s culture (â€Å"Rob Parson†, p 90). Before long, conflicts will surface and a series of problems will occur. How to minimize the misalignment? The organization needs to clearly communicate its mission and vision statement to its employees. Then employees should be encouraged to find similarities of their goals and the statement. If a gap exists, managers can work with employees to identify key characteristics of the two and find a common ground. In Parson’s case, because his personal vision is not aligned with Morgan Stanley’s, he faced problems when working with other colleagues and got frustrated by not understanding what he did wrong (â€Å"Rob Parson†, p 92). If his goals had been aligned with Morgan Stanley’s, he would have had a more effective working relationship and without doubt, his performance would have been greatly enhanced. Second way to achieve the balance is to drive organizational value through sustained performance. Assessing employees’ skills, investing on training programs and fostering an environment for continuous improvement are strategies for a sustained performance. Rob Parson may not be ready to be promoted to Managing Director, but inevitably, he has great potentials. What steps should be taken to make Parson a more effective leader? do something to utilize RP’s energetic, entrepreneurial nature that organ Stanley needed to penetrate the sector? _ First, I recommend that Nasr provide Parson constructive feedback and coaching. Nasr was worried about the potential risk of losing him(â€Å" Rob Parson†, p92), but if conducted in an effective way, feedback can help Parson understand more about himself and others, while coaching can help him reflect on discoveries from the feedback and make action plans for improvement. The existing 360-degree evaluation has provided factual basis, and Nasr can work together with Parson to explore unconscious mind behind certain behaviors and discuss what impact these behaviors had on others. Second, align Parson’s goals with Morgan Stanley’s vision. Before he went to work at Morgan Stanley, Parson knew that he was not the typical Morgan Stanley type (â€Å"Rob Parson†, p 90), however, one does not have to be one particular type to share the same vision with the organization. I recommend that Nasr sit down with Parson, go over Parson’s personal goals, and help him identify common theme with Morgan Stanley’s vision. The more aligned Parson’s goal is with Morgan Stanley’s, the more Parsons will feel being part of the team. Parson brings Morgan Stanley experience and talent in an area it needs improvement, and Morgan Stanley provides Parson the platform to utilize his skills and expand career horizon. The link between Parson’s goals and Morgan Stanley’s vision will help Parson take ownership of Morgan Stanley’s vision greatly. Thirdly, I recommend forming a knowledge sharing community in Capital Market Services. Parson was consistently commended for his strong marketing knowledge and relationship management skills (â€Å"Rob Parson†, pp 95, 96, 97), both of which many employees lack. Other employees also have valuable experiences from different functions, which Larson was not open to listen before. â₠¬Å"Lessons learned† and â€Å"Lunch and Learn† can both be examples of implementing the knowledge sharing. Gathering collective expertise and wisdom from employees will bring team closer, and add value to achieve Morgan Stanley’s goal of becoming the world’s best investment bank (â€Å"Rob Parson†, p87). The process knowledge exchange will provide Parson more opportunities to interact with colleagues in a different environment, where everyone’s goals are aligned to enrich their knowledge base. First of all, get his buy-in of Morgan Stanley’s culture. Before he went to work at Morgan Stanley, Parson knew that he was not the typical Morgan Stanley type (â€Å"Rob Parson†, p 90). I recommend that Nasr sit down with Parson, go over Parson’s personal goals, and help him identify common theme with Morgan Stanley’s vision. The more aligned Parson’s goal is with Morgan Stanley’s, the more Parson will feel be in the team. Second, I recommend that Nasr conduct feedback session between him and his peers, encourage conversation to discuss conflicts and observations. Use this as an opportunity to increase the openness and appreciation of new style and idea among the team as well. To learn and understand more about each other, May be used as an opportunity to create synergy.

Economic development Essay

Today, education is the most important tool for the development of society. There is a direct correlation between education and development of society. The countries that realize this fact, giving the required importance for their education system, have become highly developed. Education should be promoted since it is the most important factor for the development of a country. The promotion of the education is depended on the factors like literacy rate in a country, schooling rate in the primary, secondary and higher education, proliferation of training technologies, and the quality of the education. This promotion process should be considered as a necessary condition for economic, technological and social development for a nation. In other words, the process of a successful development depends on the fact of gibing the society a conscious of change which is highly connected to education. Fist of all, education enlightens people. The educated person is the person who improves oneself. A person increases her/his level of knowledge through education, so he/she has a better understanding and analyzing of daily matters and an agenda. That person can make logical deductions based on the knowledge he gains and refuses the traditional corrupted understanding. Individual’s ability of the interpretation of knowledge through one’s intelligence and skills is supported by education; accordingly, increasing the creativity and intellectual thinking. An individual can learn about different cultures, lifestyles and history from past to present; hence education provides universal perspective to an individual. The most important differential of uneducated person is having a narrow point of view. A person should be educated in order to learn taking objective decisions and being liberated from the social pressure. Besides, educated people respect the rights of others and they have a fair understanding of the concept of equality, right to life, and right to property. The reason why developed countries show highly respect to the individual rights is that the education level of the country is being fairly high. On the other hand, the reason why there are deep inequalities between women and men or rich and poor in under-developed countries is that the education level in there is being fairly low. Besides, there is also a lack of respect to the human rights in these under-developed countries due to low education level. Secondly, education affects the development of science and technology of a country. Technological developments increase by knowledge and research which is provided by education. It is the advancement and proliferation of technology that makes countries developing by the production of knowledge, schooling of creative minds leads countries develop economically, technologically and politically. Education, advancement of technology and development are in a circle movement which produces itself. Cakmak also says that as a result of the creation of science and technology, mobility of scientific knowledge, and nurturing of individuals with creative minds, countries have experienced important economic and political changes which lead to infinitive competition among them in the fields of education, development and innovation (Cakmak O. 2008). In addition, developed countries use technology as a part of their education system. Thus, every student can follow technology and learn about the newest advancements which lead them learn better and improve their intelligence. Finally, education leads knowledge turn into money that improves the economy of a country. Educated people knowing to learn how to invest, produce, expand the business adjusts and improves the economy causing the increase of gross domestic product per capita. Education also gives more job opportunities to people in the business sector. According to OECD, the effect of education to the economic development is proved in the researches of economic growth in 1960s. The researches show that contribution of education to the economic growths is really important and this percentage differs as %7 in England, %15 in USA, %14 in Belgium, %16 in Argentina, and %25 in Canada (OECD, 2005). Some may argue that education does not affect the economic development of a country. There are lots of uneducated but successful business men. People can learn how to run a business without an education. To illustrate, â€Å"Sak? p Sabanc? , who is the founder and chairman of the Sabanc? Holding due to the reason suffering from pneumonia three successive years, had to leave the high school and start to work in BOSSA Flour Factory in 1950 with a wage of 50 TL† (NTV Haber). Considering his life, it is obvious that one can learn how to run a business without education. Hence, it is not only education but also experience that makes one successful in business. All in all, economic, social and technologic development of a country is highly related to the education level of that country. Without education, a country can not develop. The only way of individual’s enlighten and learning to use knowledge, and increase of technology is education. Thus, education should be promoted since it is the most important factor for the development of a country.

Stakeholder Theory

The Stakeholder Theory Charles Fontaine Antoine Haarman Stefan Schmid – December 2006 – Stakeholder Theory of the MNC Index 1. Introduction †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 3 2. Basic idea of the Stakeholder Theory and Definition †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 3 2. 1. 2. 2. 2. 3. 2. 4. 2. 5. The stakeholder concept – popular and trendy†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 4 Different definitions of Stakeholder †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 5 What is a Stakeholder? à ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 6 Who are Stakeholders? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 6 History of the Stakeholder Theory†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 7 3. Contribution of Freeman to the stakeholder literature †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 9 3. 1. 3. 2. Freeman Strategic Management †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Freeman’s essential book: A stakeholder approach †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 10 4. Normative, instrumental, and descriptive stakeholder theory†¦. 13 4. 1. Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 13 4. 2. Normative theory†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 14 4. 2. 1. Objective†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 4 4. 2. 2. The action of a company should be ‘ethic’†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 15 4. 2. 3. Freeman’s normative theory †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 15 4. 3. Analytic theory†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 17 4. 3. 1. Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 17 4. 3. 2. Strategic management: Freeman (1984) and Savage et Al. (1991)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 18 4. 3. 3. Stakeholder identification: Mitchell, Agle and Wood (1997)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 21 4. 3. 4. Friedman and Miles (2002)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 22 5. The stakeholders: from theory to practice†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 24 5. 1. 5. 2. 5. 3. 5. 4. The Corporate Social Responsibility theory †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 4 The three main current o f the CSR †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 26 The different CSR strategies †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 28 The Limits of the theory and its application †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 30 6. Conclusion †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 33 2 Stakeholder Theory of the MNC 1. Introduction In our work we want to explain the principle ideas of the stakeholder theory. The fact that the stakeholder concept has achieved widespread popularity among academics, media and managers we think that it is an important task to bring some system into all those confusing approaches around to the stakeholder concept. At the beginning we will comment on the basic idea of the stakeholder theory. We will also try to give a clear definition of what the concept is all about. Freeman who has contributed a lot to this approach will be the main guide line in our work. We will also give a brief overview of the history of the stakeholder concept and how it developed and why it became so popular lately. After that we will explain in a bit more detail the importance for organization attention to stakeholders. Further on we want to show how the stakeholder concept has been realized by companies. At the end of the paper we want to show the application and the limits of the stakeholder theory. In general the goal of our work is to give a better understanding of the stakeholder concept and make readers sensitive about how the stakeholder concept could change management practice. . Basic idea of the Stakeholder Theory and Definition The traditional definition of a stakeholder is â€Å"any group or individual who can affect or is affected by the achievement of the organization’s objectives† (Freeman 1984). The general idea of the Stakeholder concept is a redefinition of the organization. In general the concept is about what the organization sh ould be and how it should be conceptualized. Friedman (2006) states that the organization itself should be thought of as grouping of stakeholders and the purpose of the organization should be to manage their interests, needs and viewpoints. This stakeholder management is thought to be fulfilled by the managers of a firm. The managers should on the one hand manage the corporation for the benefit of its stakeholders in order to ensure their rights and the participation in decision making and on the other 3 Stakeholder Theory of the MNC hand the management must act as the stockholder’s agent to ensure the survival of the firm to safeguard the long term stakes of each group. The definition of a stakeholder, the purpose and the character of the organization and the role of managers are very unclear and contested in literature and has changed over the years. Even the â€Å"father of the stakeholder concept† changed his definition over the time. In one of his latest definitions Freeman (2004) defines stakeholders as â€Å"those groups who are vital to the survival and success of the corporation†. In one of his latest publications Freeman (2004) adds a new principle, which reflects a new trend in stakeholder theory. In this principle in his opinion the consideration of the perspective of the stakeholders themselves and their activities is also very important to be taken into the management of companies. He states â€Å"The principle of stakeholder recourse. Stakeholders may bring an action against the directors for failure to perform the required duty of care† (Freeman 2004). All the mentioned thoughts and principles of the stakeholder concept are known as normative stakeholder theory in literature. Normative Stakeholder theory contains theories of how managers or stakeholders should act and should view the purpose of organization, based on some ethical principle (Friedman 2006). Another approach to the stakeholder concept is the so called descriptive stakeholder theory. This theory is concerned with how managers and stakeholders actually behave and how they view their actions and roles. The instrumental stakeholder theory deals with how managers should act if they want to flavor and work for their own interests. In some literature the own interest is conceived as the interests of the organization, which is usually to maximize profit or to maximize shareholder value. This means if managers treat stakeholders in line with the stakeholder concept the organization will be more successful in the long run. Donaldson and Preston (1995) have made this three-way categorization of approaches to the stakeholder concept kind of famous. 2. 1. The stakeholder concept – popular and trendy In the past view years the concept of stakeholders has boomed a lot and academics wrote a lot about the topic. But also non-governmental organizations (NGOs), regulators, media, business and policymakers are thinking about the 4 Stakeholder Theory of the MNC concept and are trying to implement it in some way or the other. Most contributions are particularly about the normative principle. They promote the vision of the company and the role of managers whose objective is mainly to maximize shareholder value in order to be sustainable. However, this perspective seems to be giving way to that business has more and broader responsibilities. Those are best defined in terms of the stakeholder approach. Another reason why this topic is very popular and contested among theorists is that there is quit an amount of contesting literature around which is tried to be replaced and up dated. Along with the popularity has come a profusion of different overlapping approaches to the stakeholder concept. This has led to a confusing situation in this sector. In order to deal with this conceptual con fusion a number of classification schemes have been developed. The most famous literature contribution which makes the distinction between normative and strategic or analytical stakeholder theory was done by Donaldson and Preston in 1995. We will discuss this concept of stakeholders in more detail later on in our paper. 2. 2. Different definitions of Stakeholder As a consequence of the booming of the stakeholder concept and the literature written about the topic a lot of different definitions of stakeholder developed. The use of the stakeholder approach in big variety of context brings some criticism to the concept with it. Friedman (2006) mentions: That group of writers comes to coalesce around particular social constructions of reality, leading to writers referring to stakeholders without being aware of relevant theoretical issues that have been raised in other literatures. Roberts and Mahoney (2004) have examined 125 accounting studies that used the stakeholder language and found that nearly 65 percent â€Å"use the term stakeholder without reference to any version of stakeholder theory†. The important thing is that writers use the same label to refer to a lot different concepts. This of course can have great consequences on ethical, policy, and strategic conclusions. 5 Stakeholder Theory of the MNC 2. 3. What is a Stakeholder? In the book of Freeman (1984) the earliest definition is often credited to an internal memo report of the Stanford Research Institute (SRI) in 1963. They define them as â€Å"those groups without whose support the organization would cease to exist†. Freeman (2004) has continued to use this definition in a modified form: â€Å"those groups who are vital to the survival and success of the organization†. This definition is entirely organization orientated so the academic circles prefer the definition of Freeman (1984) where he defines stakeholders as â€Å"any group or individual who can affect or is affected by the achievement of the organization objectives†. About twenty of the 75 definitions share this definition. Friedman (2006) states that this definition is more balanced and much broader than the definition of the SRI. The phrase â€Å"can affect or is affected by† seems to include individuals of outside the firm and groups may consider themselves to be stakeholders of an organization, without the firm considering them to be such. A more detailed distinction and analysis of the different definitions would go far beyond the extent of this paper. 2. 4. Who are Stakeholders? A very common way of differentiating the different kinds of stakeholders is to consider groups of people who have classifiable relationships with the organization. Friedman (2006) means that there is a clear relationship between definitions of what stakeholders and identification of who are the stakeholders. The main groups of stakeholders are: †¢ †¢ †¢ †¢ †¢ Customers Employees Local communities Suppliers and distributors Shareholders In addition other groups and individuals are considered to be stakeholders in the literature of Friedman (2006): 6 Stakeholder Theory of the MNC †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ The media The public in general Business partners Future generations Past generations (founders of organizations) Academics Competitors NGOs or activists – considered individually, stakeholder representatives Stakeholder representatives such as trade unions or trade associations of suppliers or distributors Financiers other than stockholders (dept holders, bondholders, creditors) Competitors Government, regulators, policymakers †¢ †¢ Managers are treated differently in the literature. Some regard them as stakeholders others embody them in the organization’s actions and responsibilities. A very interesting view of managers came from Aoki (1984), who saw managers as referees between investors and employees. Of course all categories of stakeholder gr oups could be defined more finely. For example media could be split up into radio, television and print media, or employees as blue-collar and white collar workers, or in terms for which department they work. An advantage of finer categories of stakeholders is that by doing so more homogeneous grouping of people is more likely. The negative fact about this would be the greater chance of overlap of interests and actions. 2. 5. History of the Stakeholder Theory In the mid-1980 a stakeholder approach to strategy came up. One focal point in this movement was the publication of Richard Edward Freeman. He is generally credited with popularizing the stakeholder concept. The title of the work is – Strategic Management and only the subtitle is A Stakeholder Approach and came out in 1984. Stakeholder Theory of the MNC Doing this he indicated that his view of the stakeholder concept was done from the perspective of the company. He built on the process work of Ian Mitroff, Richard Mason and James Emshoff. Actually the use of the word stakeholder came from the pioneering work done at Stanford Research Institute (SRI) in the 1960s. They further were heavily influenced by several concepts that we re developed in the planning department of the Lockheed Company and these ideas were developed from the researching done by Igor Ansoff and Robert Steward. Ansoff was around 1960s working for the SRI in association with Lockheed (Friedman 2006). It is also clear that business leaders were thinking and expressing the stakeholder concept long before the early 1960s. Dodd (1932) states that already GEC was identifying four main groups which whom they had to deal with. Those four groups were defined as shareholders, employees, customers, and the general public. Further, Preston and Sapieca (1990) mentioned that Johnson & Johnson identified customers, employees, managers, and the general public in 1947. The company Sears named „four parties to any business in the order of their importanceâ€Å"as â€Å"customers, employees, community and stockholdersâ€Å"in the year 1950. Schilling (2000) that the start of thinking about the stakeholder concept was the work of Follet in 1918. Friedman (2006) considers â€Å"Here a concern about the corporation, which emerged along with the origins of the corporation as a legal entity which he, calls the soulless corporation†. This shows a moral or normative vacuum that has favored ideas of how this could or should be dealt with. In order so fill this vacuum the stakeholder concept has come up to handle this demand. By distinguishing in this work between pre- and postFreeman (1984) it should be easier to understand why the stakeholders approach has become so popular during the last twenty years. Generally important to know is that from the start on the stakeholder approach grew out of management practice. 8 Stakeholder Theory of the MNC 3. Contribution of Freeman to the stakeholder literature 3. 1. Freeman Strategic Management An argument for the more frequently used stakeholder concept in the early 1980s could be the changes among workers, students, consumer groups and environmentalists in the late 1960s. One possibility of arguing about the development of this field is to see the planning process as becoming increasingly sensitive to the business environment and the need for good information about it. Friedman (2006) has the opinion that at the time where the SRI came up with their memo they called for information systems to scan and track stakeholder responses to changes in corporate strategy as part of this environment. The SRI has developed â€Å"measures of satisfaction† for the stakeholder groups who they have found. Freeman (1984) noted that planners did not want to attempt to influence specific stakeholder behavior rather they wanted only to forecast the future environment in order to adapt it with the capabilities of the company. In the 1960s the environment was very stable, relatively static and kind of predictable. Freeman (1984) stated that prior to his work, the strategic planning literature did hardly consider stakeholders, and when, only very undefined, as generic groups, and only legitimate or friendly stakeholders. The groups like competitors or other rivals were left out. The literature of that time just developed simplistic approaches for considering the environment the stakeholders were ignored. Porter (1980) for example was one theorist who dealt with the environment and split it up into his SWOT analyses (strength, weakness, opportunities and threats). Friedman (2006) mentions an interesting exception. Ansoff who was a key contributor to the strategy literature from the 1960s to the 1970s and was part of the Lockheed-Stanford connection that produced the initial stakeholder definition. He defines objectives as â€Å"decision rules which enable management to guide and measure the firm’s performance towards its purpose† and responsibilities as â€Å"obligations which the firm undertakes to discharge â€Å"and not â€Å"part of the firm’s internal guidance and control mechanism† (Ansoff1965). Another interesting contribution he made is that the distinction of constraints which he defined as 9 Stakeholder Theory of the MNC â€Å"decision rules which exclude certain options from the corporations freedom action† such as certain rules or regulations enacted by the government. 3. 2. Freeman’s essential book: A stakeholder approach The main idea behind the book of Freeman’s book titled Strategic Management, A Stakeholder Approach, was to try to build a framework that was responsive to the concerns of managers who were being confronted with unprecedented levels of environmental turbulence and change. He argued (Freeman 1984): â€Å"Gone are the good old days of worrying only about taking products and services to market, and gone is the usefulness of management theories which concentrate on efficiency and effectiveness within this product-market framework†. Traditional strategy frameworks were not helping managers anymore to develop new strategic directions and also did not help creating new opportunities. Freeman (1984) said that current theories are inconsistent with both the quantity and kinds of change that are occurring in the business environment of the 1980’s. Turbulence organizations are facing the need for new management and a new conceptual framework was. And his approach was a response to this challenge. In Freeman’s (1984) opinion it was not enough to solve the calls for increased productivity using the methods from Japan or Europe. He believes that â€Å"business-labor-government cooperation† is only part of the solution. Both internal and external change has meant that the model of the organization as a mere resource-converter is no longer â€Å"valid† and suitable. Internal change includes owners, customers, employees and suppliers. External change for Freeman (1984) includes: The emergence of new groups, events and issues which cannot be readily understood within the framework of an existing model or theory†¦. It makes us uncomfortable because it cannot be readily assimilated into the relatively more comfortable relationships with suppliers, owners, customers and employees†¦. It originates n the murky area labeled â€Å"environment† and affects our ability to cope with internal changes. 10 Stakeholder Theory of the MNC Some examples for external change would have be the expansion of government activities, the increase in foreign competition, the 1960s environmentalist movement associated with the publication of Rachel Carson’s The Silent spring (1962) and the formation of the Environmental Protection Acts. the growth of groups concerned with special interests such as gun control or abortion, and also the media became more important in business. All those changes favored the need of a new model of the organization. Freeman (1984) made his view of the firm with the common hub-andspoke picture (see Figure 1). Managers are not mentioned because they work within the firm and so they are assumed to be within the hub. Important to know is that Freeman notes that the illustration of his diagram is very oversimplified and as already mentioned the groups shown can be broken down into more specific categories (see Section 2. . ). Freeman chose the word Stakeholder on the basis of the traditional term stockholder which takes only a look at the economic point of view. Where the stakeholders are defined as â€Å"any group of individual who is affected by or can affect the achievement of an organization’s objectives† (Freeman 1984). 11 Stakeholder Theory of the MNC Figure 1 : Stakeholder map of a MNC / Source: Freeman (1984) Owners Political Activists 12 Stakeholder Theory of the MNC The purpose of stakeholder management was to create methods to manage the different groups and relationships that resulted in a strategic fashion. Further Freeman (1984) thinks that the idea of stakeholders, or stakeholder management, or a stakeholder approach to strategic management, suggests that managers must formulate and implement processes which satisfy all and only those groups who have a stake in the business. The main task in this process is to manage and integrate the relationships and interests of shareholders, employees, customers, suppliers, communities and other groups in a way that guarantees the long-term success of the firm. A stakeholder approach is very much concerned about active management of the business environment, relationships and the promotion of shared interests in order to develop business strategies. But due to the fact that a lot of different stakeholder concepts are around in literature in order to get a better overview the next chapter will go in more detail in the contribution to the literature done by Donaldson and Preston (1995) who distinguish between normative and strategic or analytical stakeholder theory. 4. Normative, instrumental, and descriptive stakeholder theory 4. 1. Introduction Freeman’s work â€Å"Strategic Management: A stakeholder Approach† (1984) offers a managerial and practical scope and does not really constitute a theory. But it has constituted a base for the development of the stakeholder theory, witch have been widely developed since the 1980’s. Stakeholder concept gave rise to heterogenic theoretical developments witch have been summarized in Donaldson and Preston Article â€Å"The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications† (1995). They suggested that the stockholder theory literature can be seen as three branches: 13 Stakeholder Theory of the MNC – Descriptive: The aim is to understand how managers deal with Stakeholders and how they represent their interests. The corporation is viewed as a constellation of interests, some time competitive and some time cooperative. The analytic theory will show how the MNC can deal with these divergent interests of stakeholders. – Instrumental Approach: Study the organizational consequences of taking into account stakeholders in management examining the connections between the practice of stakeholder management and the achievement of various corporate governance goals. Normative: Identification of moral or philosophical guidelines linked to the activities or the management of corporations. Donaldson and Preston argue that if these three approaches are combined without acknowledgement it would result to confusion. First we will study the normative approaches of the stakeholder theory witch are considered by many as the core of the theory, then we wi ll study the Instrumental and descriptive theory (analytic), and we will finally try to find common concepts of the stakeholder theories. 4. 2. Normative theory 4. 2. . Objective The objective of the normative theory is to answer the following questions, â€Å"what are the responsibilities of the company in respect of stakeholders? † and â€Å"why companies should take care of other interests than shareholders interests? †. The normative theory is linked to moral, values and philosophic purposed. For Donaldson and Preston (1995) the normative theory is the core of the stakeholder theory. For them stakeholders have a legitimate interest in MNC's and their interests have 14 Stakeholder Theory of the MNC intrinsic value. But Freeman think that the idea of Donaldson and Preston suppose a separation between economics and ethics spheres. For Freeman every organization theory incorporates a moral dimension, even if it is most of the time implicit. For many authors relationships between the firm and stakeholders are based on moral commitments. Not only to optimize profit managing stakeholders relationships in an optimal way. The relations between firms and its stakeholder can be valuable for the company as a reflection of it values and principles. Each company should define fundamental moral principles, and use these principles as a basis for decision making. . 2. 2. The action of a company should be ‘ethic’ One pillar of the normative stakeholder theory is that the company decisions affect stakeholder outcomes and has to be ethic. In this kind of situation, when the action of an agent affects an other agent, the company has to build ethics principles. Decisions made without any consideration of their impact are usually thought to be unethical. Donaldson and Preston (1995) state that the stakeholder interests has an intrinsic worth not indirectly linked to the company interests. A firm should not ignore claims of stakeholders simply because honoring them does not serve its strategic interests. The firm should build principles or â€Å"rules of the game† on how the company should operate building contracts with stakeholders. 4. 2. 3. Freeman’s normative theory Evan and Freeman (1990) tried to build a normative theory based on this definition of stakeholders: â€Å"Those groups who are vital to the survival and success of the corporation†. It means customers, employees, suppliers, communities, shareholders and managers. Evan and Freeman call for a redefinition of the purposes of the firm to act as a vehicle for coordinating stakeholders interests. They propose two principles: 15 Stakeholder Theory of the MNC †¢ Principle of corporate legitimacy. The company should be managed for the benefit of its stakeholders. Stakeholders must participate in decisions that substantially affect their welfare. †¢ The stakeholder fiduciary principle. Managers must act in the interests of the stakeholders as their agent in the interests of the corporation to ensure the survival of the firm. Managers have the same duties than other employees but they also have a duty of safeguarding the welfare of the firm. For making stakeholder management practicable Evan and Freeman propose a stakeholder board of directors comprising representatives of the five stakeholder groups, plus a director witch would be elected unanimously by the others and be vested with the duty of caring for all stakeholders. One year later in ‘doctrine of fair contracts† Freeman develops how contracts can be made between the corporation and stakeholders. In the model stakeholder representatives are assumed to be rationally self interested and to understand the implications of different corporate designs for success or failure. In this condition parties should choose the six following rules (‘Doctrine of fair contracts’ Freeman 1994): †¢ The principle of entry and exit: The contract has to define process that clarify entry, exit and renegotiation conditions for stakeholders to decide when an agreement can be fulfilled †¢ The principle of governance: Procedures for changing the rules of the game must be agreed by unanimous consent. This would lead to stakeholder governing board. †¢ †¢ †¢ The principle of externalities: If contract between A and B involve C, C has to be invited as a party of the contract. The principle of contracting costs: Each parties must share in the cost of contracting The agency principle: Any party must serve the interests of all stakeholders 16 Stakeholder Theory of the MNC †¢ The principle of limited immortality: The corporation should be managed as if it can continue to serve the interests of stakeholders through time. These principles represent an ideal to guide actual stakeholders in devising a corporate constitution or charter. It permits to build strategy on ethics asking â€Å"what do a company stand for? † in conjunction with it strategy decisions. 4. . Analytic theory 4. 3. 1. Introduction Has we have seen in the introduction the analytic part of the stakeholder theory is composed of what Donaldson and Preston called the instrumental and the descriptive approach. The objective is to understand how managers deal with stakeholders, how they represent their interests and the impact of the stakeholder approach in the achievement of various cor porate goals. We are going to consider an organization centric view of the stakeholder theory witch mean that the firm is considered to be the nexus of the interests of each stakeholder. This is the vision of Freeman and his model has seen contributions of Savage (1991), Clarkson (1995), Jones (1995), and Mitchell, Agle, and Wood (1997). The analytic theory is necessary to answer the question: how to organize into hierarchy stakeholders influence? Each author has a different point of view and we are going to see each model, theory or contribution. Even if their theories converge in order to find a unique stakeholder theory, there are still differences and the authors have not found a consensus yet. 17 Stakeholder Theory of the MNC 4. 3. 2. Strategic management: Freeman (1984) and Savage et Al. (1991) Freeman gave two definitions of a stakeholder: †¢ †¢ â€Å"Group of people who can affect or can be affected by the achievement of the organization’s objectives† (1984) â€Å"Those groups who are vital to the survival of the organization† (2004) Belong to him, in order to enhance an organization’s stakeholder management it is necessary to begin by defining who the stakeholders of the corporation are. If we apply his definition, it means: â€Å"who are those groups who can affect or can be affected by the achievement of the organization’s purpose†? This mean mapping the stakeholders, providing detailed list of the specific groups and companies related to each category of stakeholders, and a corresponding list of interests. For Freeman the corporation occupies a central position and has direct connections to all Stakeholders (see Figure 1 pg. 11). Freeman suggests that each MNC should distinguish important stakeholders and negligible stakeholders. For him the MNC has to limit the number of stakeholders and to not take care of inoffensive stakeholders. To facilitate important stakeholder mapping Freeman suggests the following question: †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Who are our current and potential stakeholders? What are their interests/rights? How does each stakeholder affect us? How do we affect each stakeholder What assumption does our current strategy make about each important stakeholder? What are the â€Å"environmental variables† that affect us and our stakeholder? How do we measure each of these variables and their impact? How do we keep score with our stakeholders? 18 Stakeholder Theory of the MNC In order to find the optimal strategy for each group of stakeholder Freeman suggests analyzing the stakeholder behavior and possible coalitions between stakeholders groups. The stakeholder behavior can be delineated investigating in the past actions of such kind of groups. It is necessary to analyze the actual behavior of stakeholders, their cooperative potential and competitive threats. Coalition may develop if different groups of stakeholder have common interests or common issues linked to the activity of the MNC. They can then form a more powerful group witch has to be taken into account. For Freeman manager should scan the environment for instance of similar actions, interests, beliefs, or objectives between stakeholders groups. The formation of a coalition can change stakeholder strategy and positions on issues. These two analysis lead to a more realistic map of company’s stakeholders. It also allows the manager to construct a logical explanation to explain why specific stakeholders act in a particular way. The company has to determine the long terms objectives of each groups and consider the stakeholders as rational. This map of stakeholders allows finding the optimal strategy for each group. Freeman is going to consider two variables to determine the optimal strategy: the relative power of stakeholders and their potential to cooperate or threaten corporate strategy. Savage et Al. (1991) gave guidance on the measurement of these variables. The power of threat is determined by resource dependence, the stakeholder’s ability to form coalitions, and relevance of the threat to particular issue. The potential to cooperate is determined by the stakeholder’s capacity to expand its dependence with the organization: the greater is the dependence, the greater is the willingness to cooperate. As a result Savage et Al. distinguish four types if stakeholders: †¢ Supportive: high cooperative potential and low competitive threat. Considered as the ideal type and it includes the board of trustees, managers, employees, parent companies, suppliers, service providers and non-profit organizations. 19 Stakeholder Theory of the MNC †¢ Marginal: low cooperative potential and competitive threat. Includes consumers’ interest groups, professional association for employees and shareholders. †¢ †¢ Non-supportive: low cooperative potential and high competitive threat. Includes competitors, unions, media and government. Mixed Blessing: high cooperative potential and competitive threat. Includes client and organizations with complimentary products and services. Freeman distinguishes four main strategies depending of the type of stakeholders: †¢ Offensive strategy: Should be adopted when a group is supportive. It includes trying to change stakeholder objectives or perceptions, to adopt the stakeholder position or to link the program to others that the stakeholder views more favorably. †¢ Defensive strategy: Should be adopted when a group is Non supportive. The objective is to prevent competitive threat on the part of these stakeholders. It means reinforcing current beliefs about the firm, maintaining existing programs or letting the stakeholder drive the integration process. †¢ Swing strategy: Should be adopted when a group is Mixed blessing. The firm has to take decisions such as changing the rules, the decision forum, the transaction process†¦ †¢ Hold strategies: Should be adopted when a group is marginal. The company should hold its current position and continue current strategic program. Has we can see Freeman but also Savage et al. o a separation of stakeholders regarding the cooperative potential and the competitive threat. 20 Stakeholder Theory of the MNC Clarkson (1995) introduce a distinction between primary stakeholders and secondary stakeholders. Primary stakeholders as those â€Å"without whose continuing participation, the corporation cannot survive as a going concern,† suggesting that these relations hips are characterized by mutual interdependence. Secondary stakeholders are not vital for the MNC. Primary stakeholders are the partners of the firm whereas secondary stakeholders have voluntary relationships with the firm. 4. 3. 3. Stakeholder identification: Mitchell, Agle and Wood (1997) The major contribution for relationships between managers and stakeholders and the way to categorize them comes from Mitchell, Agle, and Wood (1997). They tried to find a model to explain logically why managers should consider certain classes of entities as stakeholders and how prioritize stakeholder relationships. They put forward three objective criterions in order to organize into hierarchy stakeholders of a company: the stakeholders power to influence the firm, the legitimacy of the stakeholders relationship with the firm and the urgency of the stakeholders claim of the firm. These three criterions can be combined and it lead to seven stakeholders types (see figure 2). There are three types of power: †¢ †¢ †¢ Coercive power: based on physical resources of force, violence, or restrain Utilitarian power: based on financial or material resources Normative power: based on symbolic resources such as being able to command attention of the media But it is not the only way to classify a stakeholder as a high priority. Legitimacy is required to provide authority. They use the Suchman’s definition of legitimacy: â€Å"a general perception that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs and definitions. â€Å" Urgency is based on time sensitivity, the degree to witch managerial delay in attending to the claim is unacceptable fro the stakeholder, or critically. Urgency 21 3 Stakeholder Theory of the MNC Stakeholder Type Latent: 1. Dormant 2. Discretionary 3. Demanding Expectant: 4. Dominant 5. Dangerous 6. Dependant Highly salient: 7. Definitive Figure 2: Model of stakeholder salience / Source: Mitchell, Agle, and Wood (1997) All attributes can be gain as well as lost. A stakeholder is a low priority if only one attribute is recognizes, he became a moderate priority if two attributes are held and a high priority if the three attributes are perceived. Possession of an attribute is subjective. Sometime a stakeholder may not be conscious of possessing an attribute, but at the end it is the manager who decides witch stakeholder has this or another characteristic. So manager could incorrectly perceive the field, and should ask the questions Freeman uses for mapping stakeholders. Furthermore this possession is also dynamic. For example for Nike, NGOs were only legitimate at the beginning, but became urgency with the media support and then powerful with the boycott appeal. 4. 3. 4. Friedman and Miles (2002) Friedman and Miles (2002) use two criterions to define firms stakeholder relationships. Their typology of organization-stakeholder relations is based on two distinctions: †¢ Compatible or incompatible in terms of sets of ideas and material interests 2 Stakeholder Theory of the MNC †¢ Necessary or contingent. Necessary relationships are internal to a social structure or to a set of logically connected ideas. Contingent relations are not integrally connected. As a result four relationships between MNC and stakeholders are distinguished. For each of them they encourage certain strategic actions. Necessary Type A Defensive Compatible Sh areholders Top management Partners Type D Compromise Trade unions Low-level employees Incompatible Government Customers Creditors Some NGOs Contingent Type B Opportunism The general public Companies connected through Common trade association Type E Competition/elimination Criminal Members of the public Some NGOs Type A: Necessary compatible relationships when all parties have something to win this connection. It is so logic to protect this relationship as a strategy. 23 Stakeholder Theory of the MNC Type B: contingent compatible institutional arrangements. The two parties have the same interest but there is no direct relationship between parties. An opportunistic strategy is the logical strategy. Type C: contingent incompatible institutional arrangements. The two parties have separate, opposite and unconnected set of idea or interests. It becomes a problem when one of two parties insists on its position. The strategy corresponds of defending its own interest by seeking to eliminate or by discrediting oppositional views. Type D: Necessary incompatible relations occur when material interests are necessarily related to each other, but their operations will lead to the relationship itself being threatened. The situational logic is concession and compromise. As we can see stakeholder theories, normative and analytic, are widely different between times and authors. . The stakeholders: from theory to practice. 5. 1. The Corporate Social Responsibility theory The way businesses involve the shareholders, employees, customers, suppliers, governments, non-governmental organizations, international organizations, and other stakeholders is usually a key feature of the Corporate Social Responsibility (CSR) concept. According to the Commission Green Paper (2001), the CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Amongst other things, this definition helps to emphasize that: †¢ An important aspect of CSR is how enterprises interact with their internal and external stakeholders (employees, customers, neighbors, non-governmental organizations, public authorities, etc. ); 24 Stakeholder Theory of the MNC †¢ †¢ CSR covers social and environmental issues, in spite of the English term corporate social responsibility; CSR is not or should not be separate from business strategy and operations: it is about integrating social and environmental concerns into business strategy and operations; CSR is a voluntary concept. The social responsibility is presented as the consideration of the expectations of the stakeholders and the fact, for the company, of â€Å"answering† to the consequences of its decisions to these stakeholders. At the pragmatic level, this approach is often summarized by the concept of â€Å"triple bottom line â€Å"(John Elkington) that is the consideration in the management of economic, environmental and social objectives. Companies are dependent on stakeholders to obtain the necessary resources for their survival and for their development. The legitimacy of the company to use these resources depends on the correspondence of its behavior to rules and values recognized by the society; it will obtain a â€Å"license to operate† on the condition of not being considered as a predator of the natural and social environment. It is about a utilitarian legitimacy. The employees, when they have the choice, will prefer to work in a socially responsible company. The consumers tell, in inquiries, to prefer goods produced in the respect for the fundamental rights of the work. Besides the financial performances, the investors integrate, in their choices of portfolios, the risk of loss of † reputation capital â€Å", which can also be translated by a loss of financial capital. Substantial or symbolic, the strategies of correspondence answer different constraints: †¢ The constraints imposed by the law and matched by penalties; we define the exercise of the social responsibility as to go beyond the only respect for the legal obligations. The motivation of certain companies to set up devices of social responsibility is often connected to the anticipation of a hardening of the legislation, especially in the environmental domain. 25 Stakeholder Theory of the MNC †¢ The professional environment generally promulgates the normative constraints; their adoption can be made on a voluntary base which values the commitment of the company. †¢ The mimetic constraints are going to lead certain companies to imitate the others, for example the † best practices † of some pro-actives leaders, and this, especially if the environment is uncertain and ambiguous. . 2. The three main current of the CSR Within the literature in management, the contemporary debate on the responsibility of companies took its origin in an article of Bowen1 supporting that companies should revisit their strategies by integrating the social and environmental dimensions to answer the various pressures of the society. Among the large number o f articles dedicated to the social responsibility of companies, notably in the United States, it is possible to distinguish three currents: the ethical moralist current â€Å"Business Ethics†, the â€Å"Business and Society† current and the â€Å"Social Issue Management†. The theories of the â€Å"Business Ethics† current assert the existence of a moral responsibility of companies towards the society and future generations and postulate that the company has, by nature, a statue of moral agent, able to distinguish the good and the evil, thus having the moral duty to act in a social responsible way. In spite of its gaps, this approach generated an important movement around † the ethics of the business† and a speech which often confuses † the good and the useful â€Å", ant that is why we can find a multiplication of â€Å"ethical† charters, of â€Å"ethical† investments which are only taking advantage of the â€Å"ethics† in economic purposes. The â€Å"Business and Society† current consider that there is no waterproof partition between the company and the society: Both are in interrelation and form themselves mutually by means of their constant interactions. The company maintains, with the society, relations which are not exclusively trade and it results 26 Stakeholder Theory of the MNC from it a shape of social contract authorizing a social control by the society and the possibility to â€Å"punish† a company â€Å"disobedient†. So, the authors of this current assert that the contracts of cooperation, which establish the confidence between the firm and its stakeholders, get a competitive advantage to the company. The â€Å"Social Issue Management† current proposes tools to the administrators to improve the performance of their companies, by taking into account the expectations expressed by various actors of the society; it restores the complexity of the management by widening the field of the actors and by taking away the horizon of the decisions; the expectations of the stakeholders are integrated into the strategic methods. In fact, these currents are not set and even cross together. They share the idea that what is good for the company is also good for the society. Archie B. Carroll, one of the authors the most known for the â€Å"Business and Society â€Å"current, elaborated a model which makes reference in the Anglo-Saxon world and which presents a four level pyramid. 27 Stakeholder Theory of the MNC Each of these levels depends on those which precedes it, the satisfaction of both first one (Economic and legal responsibilities) is requested by the society, that of the third one (ethical responsibility) is expected, that of the fourth one (philanthropic responsibility) is wished. These levels, crossed with the various groups of stakeholders, can serve as reference to define the various categories of social and environmental performance that have to be estimated (D. J. Wood, 1991). 5. 3. The different CSR strategies The integration of the stakeholders’ expectations in the strategies can take several forms: †¢ Actions of patronage or sponsoring, creation of foundations: in that case, there is a separation of the social and environmental actions and the economical actions; they are used as communications strategies. However in some cases, 28 Stakeholder Theory of the MNC he implication of the employees in these actions modifies the economic functioning of the organization. †¢ Actions integrated into the strategy, which try to implement the social and environmental dimension in the economic decisions: investments, conception of products or process of production. This method, often linked to the quality method, has for objective to decrease the ri sks and to improve the economic medium-term performances. In order to put into practice, to develop and to evaluate the actions of social responsibility, the stakeholders (and the company itself) have means, which are the â€Å"piloting devices†. Among them we can quote the external reporting and the internal devices of performances measures. But, the media reports certain examples of paradoxes. A â€Å"paradox† occurs when on a side, a company begins in an action of CSR, pledges for example concerning the durable development while other side, accusing and detailed revelations about its practices emergent at the great day. Certain ONG as Christian Aid clearly denounced abuses on behalf of certain great multinationals in certain parts of the world. For example in the United States, McDonald illustrates a CSR with double face. Emblematic company, which always wished to affirm its economic and social (even environmental) engagements, this company was criticized for non-ethical practices of businesses. At the time of the treatment of the McLibel case by British justice, this one confirmed certain complaints for ill treatment of the workers, abusive publicity and cruel treatment of the animals. February 15, 2005, the European Court of the Humans Right sliced in favor of Helen Steel and Dave Morris, (two ecologists militants) in their fight with McDonald' S in the McLibel case. The lawyer of the duet declared: † the European Court of the Humans right considered that violations of the humans right had been made in their opposition – that there had been a procedural inequity in the business and that the adopted procedures were not equitable† 29 Stakeholder Theory of the MNC In the same way, a European company as Shell largely took part as a proactive pioneer of the CSR but while missing however in 2004 to report to its shareholders a reliable evaluation of its oil stocks which melted its book value. The engagement of the company in CSR obliges it to be more transparent in the social contract than it with the other actors. It creates its own Damocles sword; other authors mentioned a â€Å"mortal risk† by the mediatization of its actions (J-Y Trochon, 2003). Failing to honor this engagement, the company takes a media risk of reputation even of confidence by a â€Å"boomerang† effect. This risk will come in the event of abuse early or late to remember with force to the good memory of all those which would wish to handle the other stakeholders and the shareholders initially. The risk result in a legal sanction, or even, in a faster and frightening stock exchange sanction and destroy in fine the dearly and patiently acquired reputation (media sanction). Enron and Parmalat are two emblematic examples, which show in the only sector of the corporate governance, on the two sides of the Atlantic, the fatal outcome of attempts of manipulation. 5. 4. The Limits of the theory and its application Milton Friedman wrote â€Å"The Social Responsibility of Business is to Increase Profits†. Friedman explains that corporations do not exist in physical reality, that only people can have responsibilities, and that businesses have no responsibilities as such. He maintains that there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game. To earn profit is the purpose of the corporation that should engage in open and free competition without deception or fraud (Edward W. Younkins, 2006). In this view, it seems that the question of a Corporate Social Responsibility has no sense. Furthermore, The Freeman stakeholder definition seems to be too large and therefore its implementation is impossible. Indeed the managers have time-limited 30 Stakeholder Theory of the MNC resources and have to select the stakeholders which are going to hold attention. The factors that explain this choice are the power, the legitimacy and the urgency (as seen in section 4. 3. 3): †¢ The power is held by groups of actors who have the capacity to influence the current or future decisions of the firm (cf. Jeffrey Pfeffer, Gerald Salancik, 1978). †¢ The egitimacy of a group corresponds to its recognition by the society by virtue of a contract, of a moral right or of a supported risk because of the activity of the company. Certain groups are legitimate but have no power (minority shareholders, the local residents of a polluting site not organized in defense association). †¢ The urgency characterizes the stakeholders that are asking for an immediate attention. This urgency i s a function of the time sensibility and defines the delay of reaction of the manager acceptable or not by the stakeholders. It corresponds to a critic situation in general, notably in case of exposition at the risk. The rationality of the leaders is necessarily limited by the urgency of the problems, by the pressures and by the information systems that they have. It seems therefore an illusion to envisage an exhaustive consideration of all the potential stakeholders. The influence of the stakeholders thus depends on the perception of the leaders and the hierarchy that they establish between the various expectations, notably when these are contradictory. They are thus going to choose and to â€Å"enact† the actors who will count for the definition of their strategy. The stakeholders’ theory remains ambiguous concerning its foundations and presents certain number of limits. On one hand, it joins in a relational representation of the organization based on complete contracts, which suppose that the conflicts of interests can be solved by insuring a maximization of each group interests. 31 Stakeholder Theory of the MNC On the other hand, the stakeholders’ theory builds a reduced representation of the social and environmental responsibility of the company. What about the â€Å"dumb† stakeholders (fauna, flora), about the third absentees (future generations, potential victims)? What about the values or interests of the too weak parties for being represented? Can we reduce the general interest to the sum of each group of stakeholder interests? Companies are trading organizations and the leaders are in front of dilemmas that can only be solved according to their more or less long-term profitability objectives. The issues depend then strongly on the dynamics relations between the firm nd its stakeholder, and of the level of the expectations and the pressures of the various actors. In the calculation of the advantages and the underlying costs in the â€Å"win-win† strategies, the anticipation of the behavior and the power of the stakeholders and the authorities of regulation is determining for the adoption of a socially responsible strategy. The actual consideration of social and environmental objectives in the strategies of c ompanies depends largely on the representations which have the actors of the society of their direct or indirect power on companies. The economic logic thus remains the main axis, structuring the decisions of companies. The expectations of the stakeholders, their pressures, are the constraints which are integrated into the strategic management according to the representation of the power of these stakeholders. As argue Jean-Luc Migue, the practice of the social responsibility leads to a paradox: the social responsibility implies the replacement of a managerial decision to that of the shareholders owners. As everywhere where the rights of property are eased, for example in the public sector, the individual irresponsibility follows. The practice of the social responsibility can lead to an individual irresponsibility. On the economic level, the generalization of this practice would lead to the end of the long-term economic growth and would make thus impossible the realization of the social ends looked for by the protagonists of the social responsibility. It is necessary in this subject to return to the essential education of the 32 Stakeholder Theory of the MNC economic theory, to the market as a mechanism of penalties and rewards and in the role of the instigations on the behavior. The theory and the history demonstrate that in its research for the maximum profit for its shareholders, the company realizes „the common good † in sub-product, and especially, that the ambition of † do-gooders † to divert it from its appropriate end that is the profit produces the exactly opposite effect that the one we suppose. 6. Conclusion The Stakeholder Theory is a quite new theory in the way it introduces the concept of stakeholders in the strategic management of a Multinational Company. The purpose of the MNC is not anymore only to make profit for shareholders but also to defend an image and values respecting all stakeholders. There is of course a link between the wealth of Shareholders and the wealth of all Stakeholders because the MNC need a good reputation to sell its products and so to make profits. But it has still not been clearly proven by empirical studies. The Stakeholder Theory is very popular in our times because people, and so on stakeholders, are worried about the sustainability of the actual economic system. With globalization, companies take more and more importance and are in many cases more powerful than states. In these conditions, their action can have a huge impact on the society in general, and people ask such companies to have â€Å"ethic† and values. With deregulation, and less power of state in favour of economy, companies should not only enjoy the rights of this deregulation but also duties. And that is what stakeholders (and in particular consumers) are asking for. Examples of Shell or Nike show that an irresponsible way of management, with low ethic or values, lead to a decreasing wealth of the first stakeholder of an MNC, its owner, shareholders. One of the main problems of the stakeholder theory is: stakeholder theories! One of the major contribution in Stakeholder theory is Freeman book â€Å"Strategic Management: A Stakeholder Approach† (1984) and it is often seen as the fundament of the Stakeholder theory. Then many Economists or Sociologists have made their contribution but not always sharing Freeman concept of Stakeholders. As a signs of 33 Stakeholder Theory of the MNC these divergences we have shown that there is more than 75 definitions of Stakeholders, witch is of course the key point of the theory. This is mainly due to the fact that Stakeholder Theory is not only an economic theory, having a huge part of philosophic or sociologic concepts. But in spite of these discussions it seems possible to identify some propositions on witch every author agree: The firm has stakeholders witch have requests, every stakeholders do not have the same influence, MNC prosperity depends of the ability of the companies to manage strategic stakeholders and the principal function of managing stakeholder is to take into account and to arbitrate stakeholders requests even when there are contradictory. In practice, contributions of these different theories at the governance level establish a new base to redefine the stakes of the company and its model of governance, analyzing them with regard to the expectations and to the interests of stakeholders. It is what led to us to analyze in our third part the concept of CSR. In the sights of what we explained, it seems that the application of the CSR can only come true, in general in the social and environmental sides, under reserve that this application does not prevent from financial profits (as the CSR slogan says: † doing well by doing good â€Å"). However we can notice the attitude of companies trying to take into account, in an increasing way, this â€Å"new† approach of governance, and this, facing to more and more strong pressures coming from the different stakeholders. Furthermore, companies are more and more urged to position themselves in front of the emergence of the â€Å"sustainable development† concept, and making it, the CSR seems to be an effective instrument for the integration of this concept by companies in their strategic orientation. 34 Stakeholder Theory of the MNC References Aggeri Frank, Acquier Aurelien, (2005). 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