CSk Lecture 12]07]2011

Arguments for and aga|nst CSk

1 ICk CSk
O lallure ln performlng Lhelr soclal responslblllLy role ls vlewed as fallure Lo perform ln
flnanclal maLLers by cerLaln lnvesLors
O uslness musL reallze LhaL soclal problems can become opporLunlLles or can even
lead Lo proflLs Lg AdopLlon of meLhods Lo recycle wasLe can lead Lo proflLs ln Lhe
fuLure Lxample l1C
O uslness musL be concerned wlLh Lhe publlc lmage and Lhe goodwlll generaLed by
responslble soclal acLlons

2 AGAINS1 CSk
O 1he prlmary purpose of buslness ls proflL maxlmlzaLlon and Lo have any oLher
purpose ls noL soclally responslble
O uslness corporaLlons are responslble Lo shareholders and have no auLhorlLy Lo
operaLe ln Lhe soclal area
O oclal pollcy ls Lhe [urlsdlcLlon of governmenL noL buslness
O uslness lacks Lhe Lralnlng and skllls ln cleanlng Lhe soclal lssues
O oclal responslblllLy ls vlewed by some as anoLher excuse Lo leL blg buslnesses Lo
lncrease Lhelr power


1o whom are bus|nesses respons|b|e?
envlronmenL
general publlc
economlcally backward
soclally deprlved
All Lhese and more LogeLher are known as Lakeholders
WhaL ls a sLake? lnLeresL rlghL(legal and moral)

Def|n|t|on of sLakeholder lndlvldual who possesses a sLake
O roup or lndlvldual who beneflL from or harmed by and whose rlghLs are vlolaLed or
respecLed by corporaLe acLlon
O 1hey can be seen as belng elLher exLernal Lo Lhe organlzaLlon or lnLernal
O uL some may be boLh!






uslness flrm (managers)
O lnsurance AgenLs ulsLrlbuLe producLs
O Lmployees sell labour
O Lockholders lnvesL CaplLal
O CredlLors Lend money
O uppllers sell raw maLerlals

uL
O ome groups can be boLh lnLernal and exLernal sLakeholders
O uch as sLaff or shareholders who are also local resldenLs
Secondary stakeho|ders (|nd|cat|ve not exhaust|ve)
1PL LnL8AL uLlC poslLlve/negaLlve oplnlons
LCCAL CCMMunl1lL [obs envlronmenL
CvL8nMLn1 (CLn18AL/1A1L Anu LCCAL) regulaLlons/Laxes
CClAL AC1lvl1 8Cu soclal demands
ulnL uC81 8Cu
MLulA lmage/repuLaLlon

Attr|butes of a stakeho|der
O LeglLlmacy refers Lo Lhe percelved valldlLy of Lhe sLakeholder's clalm Lo sLake
O ower refers Lo Lhe ablllLy or Lhe capaclLy of a sLakeholder Lo produce an effecL
O urgency refers Lo Lhe degree Lo whlch Lhe sLakeholder's clalm demands lmmedlaLe
aLLenLlon
1ypes of stakeho|ders (bracket |tems are the attr|butes possessed by the stakeho|der)
O Latent stakeho|der
uormanL sLakeholder (power)
2 ulscreLlonary sLakeholder (leglLlmacy)
3 uemandlng sLakeholder (urgency)
O xpectant Stakeho|der
uomlnanL sLakeholder (power and leglLlmacy)
2 uangerous sLakeholder (power and urgency)
3 uependenL sLakeholders (leglLlmacy and urgency)
O Def|n|t|ve stakeho|ders (all Lhree aLLrlbuLes)
Mapp|ng stakeho|ders for susta|nab|||ty (power]dynam|sm dependent)
unpredlcLable buL manageable don'L know Lhelr reacLlon buL as and when lL comes up (keep
Lhem lnformed)
C owerful buL predlcLable shareholders eg how many Llmes Lhe dlvldends are pald eLc
(dynamlsm ls low [usL need Lo keep Lhem saLlsfled)
u greaLesL danger/opporLunlLy (hlgh dynamlsm mosL managemenL aLLenLlon key players need
Lo keep Lhem happy)

r|nc|p|es of stakeho|der management the C|arkson r|nc|p|e
key uest|ons |n stakeho|der management
Lakeholder/8esponslblllLy MaLrlx
Stakeho|ders conom|c Lega| th|ca| h||anthrop|c
Cwners
Customers
mp|oyees
Commun|ty
ub||c at |arge
Soc|a| Act|v|sts
Cther