Creating Value for Stakeholders notes

8/26/14

The basic idea is that businesses and the managers and executives who
manage them, actually do and should create value for customers suppliers
employees communities and financers (Stakeholders)
Business can be seen as a set of relationships between different groups
whom all of which have a stake in the companys activities
Financers financial stake in a business is in the form of stocks, and bonds
with the expectation of some type of financial return
Employee stake can be in the form of job security, wages, benefits such as
healthcare and meaningful work
Companies also have stock ownership plans, so loyal employees who believe
in the future success of the company can invest and therefore become a
financer also
Customers and suppliers exchange resources for the products and services
of a company, and in turn the receive the benefits of the products and
services
Community can grant the business the right to build facilities and in turn
they benefit from the tax base and economic and social contributions from
the business
Communities, customers, suppliers, employees, and financers are all
Primary of definitional stakeholders
As a business starts up, it may not value all five primary stakeholders the
same
A stakeholder can be seen as any group of individual who can either affect a
business, or affect/be affected by the companies purpose
Executives have as much stake as every other employee in terms of an
employment contract, but and executive is expected too to look over the
health of the business so all stakeholders can stay in harmony
The primary responsibility of the executive is to create as much value as
possible for the stakeholders. They must also find a way to rethink the
problems when stakeholder interest conflict so that the interests can go
together and after that more value can be created for each stakeholder
When tradeoffs are made, an executive must figure out how to make the
tradeoff and immediately begin improving the tradeoff for all sides