Business Administration: Stakeholder Analysis - Assignment Example

Business Administration: Stakeholder Analysis Answer The main stakeholders of acorporation include all the entities that are either directly or indirectly involved or affected by the functioning of the same. In case of the Red Lobster Company also, there a number of internal and external stakeholders involved. The company is liable to take the responsibility of the stakeholder groups to a certain extent and is also supposed to function in a way that these stakeholder groups are not negatively impacted by the operations of the company. A stakeholder may be any person, entity, group or organization that can be either positively or negatively affected by the actions of any company, organization or government. The different types of stakeholders of a company are the community, employees, customers, partners, suppliers, government and the owners themselves. There are three main categories into which the stakeholders of a company can be categorized. These are the primary stakeholders, the secondary stakeholders and the key, core or main stakeholders. The primary stakeholder group includes those entities which are ultimately impacted by the actions of a corporation. These impacts may either be positive or negative impacts. The secondary stakeholders are the intermediary entities and include those persons or organizations that may be indirectly affected by the functions or actions of any corporation. The key stakeholders, on the other hand are those stakeholders who have direct and significant influence on the success, continuity and sustainability of a corporation. The key stakeholders may belong to any of the groups of primary or secondary stakeholders. In the case of the Red Lobster Company, the key stakeholder groups can be identified to be the lobster divers. These are the main employees of the company which have significant and direct effects on the continuity and success of the restaurants of the group. The lobster divers act as the core stakeholders for the Red Lobster company because these entities are necessary for the survival of the business. At the same time, these groups of stakeholders also act as the strategic and the environmental stakeholders of the company because they can directly influence the major decisions in the strategic management of the company and the way the company perceives its environmental and societal responsibilities. The owners of the Red Lobster Company are also significant stakeholders who have direct interests in the functioning of the company and the economic profits made through the operations of the same. At the same time, the owners of the company would also be interested in the sustainability of the company so that the long term profitability is not compromised in any manner. For this purpose, the owners have to create and project an ethically, morally and legally compliant and responsible brand image. The stakes of the stakeholders involved in a company are also important determinants of the importance of the stakeholders in the organization. The stake of a stakeholder means the share or interests of an entity or a group in an organization. There may be different categories of shareholders stake in a corporation. These may include interest, right and ownership. The right of a stakeholder as a stake in the company includes both legal and moral rights. In the case of the Red Lobster Company, the stakes of the core stakeholders i.e. the lobster divers are high because they have high moral rights on the functioning of the organization. The stakes of these divers lie in the physical safety and economic validity of their work. The secondary stakeholders of the company like the Sub Ocean Safety (SOS) are the secondary and environmental stakeholders of the company because these types of organizations aim at improving the living standards of workers and prevent the exploitation of the weak economic conditions of any specific category of workers. The stakes of this organization as a stakeholder of the company lies in the interest of the nonprofit organization to improve the community of the earth as a whole. The stakes of the government are low in the case of the Red Lobster Company because the safety and health of the lobster divers comes under the human rights laws which are not legally enforceable in Nicaragua and Honduras. The stakes of the owners of the Red Lobster company are high because they have their personal interests and economic benefits associated with the profitability and sustainability of the business (Fletcher 506-511). Answer 2 There are three main types of stakeholder attributes for a corporation. These are legitimacy, power and urgency. Legitimacy refers to the importance and validity of the claim of a stake as placed by a stakeholder. Power of a stakeholder refers to the capacity or the ability of any stakeholder to influence minor or major changes in the policies of the organization or in the ways that the organization carries out its operations. Urgency is another attribute of stakeholder stake which represents the degree to which the claim of a stakeholder calls for immediate action from the perspective of the organization. As discussed before, in the case of the Red Lobster Company, the stakes of the core stakeholders of the company i.e. the lobster divers in the Mosquito Coast are extremely high. This is because their activities and behaviors directly influence the operations and the short term and long term success of the company. The stakes of the lobster divers are high in terms of urgency and power because these stakeholder groups have immense power in influencing changes in the functioning of the Red Lobster and other similar companies and because many nonprofit organizations like the Sub Ocean Safety (SOS) are focusing on the negligent conditions of these workers in the economically backward areas like the Mosquito Coast. However, the legitimacy of the stakes of these stakeholders are low because the debates regarding the ethicality and morality related to the lobster diving profession are considered to be human rights issues because of which the governments in Honduras or Nicaragua do not have much influence on the way the seafood import corporations deal with the workers. Therefore, the perceived importance and validity of the claims of these stakeholders would be much less for the case company. The stakes of the community service providers and nonprofit organizations like the Sub Ocean Safety (SOS) are high and at the same time are powerful, urgent and legitimate. The stakes of the owners of the Red Lobster Company are urgent in this case because they have a high degree of interest in maintaining a socially and ethically responsible image and in order to do so, the management of the company has to take up actions to develop suitable strategies to create value for all the stakeholder groups including the lobster divers (Fletcher 512-516). Answer 3 Stakeholder analysis is an important part of stakeholder management. The analysis of the stakeholders of a company include the identification of the primary, secondary and key stakeholders followed by an assessment of the needs and influences of each of these stakeholders, management of the stakeholders expectations with the aim of minimizing conflicts among different stakeholders groups and taking corrective actions to meet the exact requirements of the stakeholders of a company. In the present day scenario, the legal, economic, philanthropic and ethical responsibilities of a company are assuming more critical roles in deciding how well a company can manage and analyze its stakeholder groups. The Red Lobster company, like any other company operating in the modern business world has specific legal, economic, ethical as well as philanthropic responsibilities towards its various internal and external stakeholders. Considering the fact that the company is a profitable business and it is extremely dependant on the labor services provided by the local people in the Mosquito Coast, located in the Caribbean side of Nicaragua and Hungary, it can be said that the company should ideally extend its Corporate Social Responsibility (CSR) activities to improve the living standards of these local people and communities. The Mosquito Coast is an economically backward region wherein the local people are very poor and deprived of the basic necessities and proper living conditions. As such, the Red Lobster company has the responsibility to contribute to the economic prospects of the region and provide better diving equipment, conditions and medical assistance and aid to the local employees who engage in the life risking activities like lobster diving. Also, the company should consider providing assistance and economic help to the injured and physically disabled divers who have incurred damages in their bodies during the lobster diving work so that these disabled divers do not have to suffer and die unattended. Since, the Mosquito Coast area is an underdeveloped region and does not have any medical centers, therefore, the seafood import companies should engage in proper philanthropic activities to provide medical aid and assistance to the divers and their families. The Red Lobster Company can consider setting up suitable medical service providing units in the Mosquito Coast area. The Red Lobster Company should not only try to improve the economic conditions of the people in this area but should also try to ensure the reduction of accidents and physical damages to the divers during the lobster diving by providing them with adequate diving equipment, medical help, emergency services and other facilities that would help to provide aid to them in times of any injuries and malfunctions in the boats and diving processes. Also, the company should provide standard payments to the local employees and not exploit the weak economic conditions of the poor people in this area. The Red Lobster Company should also ideally try to provide medical allowances and insurances for accidents as a part of their employment packages. This would help to create a certain level of stability among the local divers and would also help to curb the aggressive risk taking attitude of the divers (Fletcher 517-521). Answer 4 The stakeholder matrix tool is a common strategic management tool used for the stakeholder analysis of any profit or nonprofit based organization. In this method, specific stakeholder groups are identified and their needs and importance in the organization are mapped against each other. In the case of the Red Lobster Company, both the involvement and collaboration are important strategies that should be taken up by the management to keep up an ethical and moral image for the corporation. Defending the interests of the company against the claims and stakes of the core stakeholder groups like the lobster divers would not be a good idea for the company because this would lead to the tarnishing of the brand reputation and create a socially irresponsible image of the corporation in the industry. This would not be good for the long term sustainability and profitability of the business. Instead an active involvement of the management of the company in adding value to the community of the area would act as a positive factor in promoting the ethical and responsible image of the business. In this era of business, consumers are looking for companies which conduct their businesses in a responsible and value adding manner. Thus, most companies are taking up Corporate Social Responsibility and philanthropic activities as a way of creating sustainable competitive advantage. Going in the same line, an active involvement of the management of the Red Lobster Company would help to ensure that the company is able to minimize the conflicts of interest among the stakeholder groups. Thus, acting in a proactive manner towards getting actively involved in the interests of the stakeholders would not only help in ensuring compliance with the ethical and legal requirements but also help to manage the stakeholders of the company in a proficient manner. Since, the power of the concerned stakeholder groups in this scenario is very high and the interests of the stakeholders are also towards the higher end, therefore, the company should ideally get directly involved in the problem in order to find a solution for the same. Another way of proper stakeholder management for the Red Lobster company would be to collaborate with various local entities and nonprofit organizations like the Sub Ocean Safety (SOS) for generating value and ultimate results towards the creation of economic and lifestyle related benefits for the local community of the Mosquito Coast. Stakeholder analysis is done with the goal of developing appropriate levels of collaboration between the stakeholders and the company in question. This ultimately ensures beneficial outcomes for both the company and the various stakeholder groups like the employees, customers, community and government through effective stakeholder management. Thus, collaboration on the part of the Red Lobster Company would help to extend the active involvement of the company in its philanthropic and ethical initiatives because these activities would be supported by other ancillary entities and communities. Thus, the Red Lobster Company can identify the success criterion for the company through the stakeholder analysis and priorities its objectives of stakeholder management to convert these into significant corporate quality goals for the business. Since the local and national governments of Honduras and Nicaragua do not have specifically established laws to protect the interests of the local divers. Therefore, the Red Lobster company should focus on enforcing certain company specific regulations on lobster diving that would help to control the numbers of accidents and physical damages to the lobster divers. Specific policies and regulations like the mandatory use of safety equipments and medical aid on the boats, the control of the maximum number of diving allowed per day and the setting of limits on the lobster diving seasons would help to control the physical damages caused to the local divers to a certain extent. After the employment of the collaboration initiatives of the Red Lobster Company with the local and international organizations, the company should also monitor the progress of the philanthropic initiatives and review them on a periodic basis to understand whether the needs and requirements of the different stakeholder groups viz. the primary, secondary and key stakeholders are appropriately identified and addressed (Fletcher 523-527). Work Cited Fletcher, Guthrie. Mapping stakeholder perceptions for a third sector organization. Journal of Intellectual Capital. Vol. 4(4): 505 – 527. 2003. Print. Read More