Mid Staffordshire NHS Trust - Organizational Management - Case Study Example

Stakeholder Theory Analysis Name Institution Instructor Date Stakeholder Theory Analysis Introduction Management is a complex undertaking that requires high level of expertise with regard to planning and dissemination of policies within organizational entities. Managers understand the role of superior management procedures in enhancing the realization of long term and shorter goals in an organization (Mansell 2013). Due to the recurrent need for proper and appropriate organizational management, experts have endeavoured to formulate theoretical premises that offer guidance on diverse issues that relate to steering of organizations. Through such theories, managers get an opportunity to select appropriate theories that fit into their organizations vision and mission. Theories also assist managers in the process of appraising their performance in order to focus on areas that require improvement and strive to maintain success in areas that exhibit the same (Friedman & Miles 2002). This research undertaking shall involve a contextual analysis of a case study by applying the underlying principles that characterize the stakeholder theory. The case study under analysis is a report on the Mid Staffordshire NHS Trust. It shall look at evident pitfalls in the particular case and ultimately explain their occurrence based on the guiding principles as articulated in the stakeholder theory. This essay shall also relay appropriate recommendations on how the entity under analysis can improve its existential threshold through application of the stakeholder theory. In order to guarantee accurate and candid presentation of ideas, this research undertaking shall incorporate materials from credible and authoritative academic publications. Analysis of the Stakeholder Theory of Organizational Management The stakeholder theory is a theoretical premise that embodies the requisite morals and values that are integral to success and profitability in regard to organizational and corporate entities. In his book strategic management: A stakeholder approach, Edward freeman offers a candid explanation of the basic principles that characterize the stakeholder theory. Since he instituted the attempts to demystify the theory, more organizations are increasingly adopting it as a guide to proper management within their jurisdictions. In this book, Edward identifies the core issues that organizations must reconcile in order to bolster their position and prospects in their specific market segment (Mitchell et al. 2002). The publication also offers recommendations on key areas that organizations must check on as a strategy for success. Generally, this theory gears towards separation of important and not so important areas that manifest in organizations. The author impresses upon organizational managers to understand the orientation of their organization as this plays an important role in informing numerous decisions that are made by the managerial team. Traditionally, organizations should hold their shareholders in high esteem and always strive to ensure that they are content with the general running of the organization. According to this school of thought, organizations are bound to prioritize on the needs of shareholders and ensure that their wish is put into consideration (Donaldson & Preston 1995). On the contrary, the stakeholder theory deviates from this argument and instead offers the need to consider other entities that have a role to play in sustenance of the organization. For instance, the theory identifies customers, suppliers, and members of staff, benefactors, government authorities, and political groupings as having a prime role to play in the success of an organization. All these categories of stakeholders must enjoy the privilege of regular consultation and involvement in the daily running of the organization. On rare occasions, competitors in the market also suffice as potential stakeholders in an organization (Phillips 2003). Therefore, all decisions that are undertaken in an organization must be cognizant to the specific needs of each category of stakeholders. However, there has been difficulty in developing a clear definition of the term stakeholder. Experts present different definitions depending on their outlook and understanding of organizational dynamics. The stakeholder theory merges strategic planning and resource allocation with a view to develop a clear understanding of how organizations function in modern world. In order to minimize instances of ambiguity, the theory offers clear explanation on the nature of the aforementioned classes of stakeholders. For instance, it explains that employees and suppliers are stakeholders but their clout in the organization cannot be viewed as commensurate. To avoid possibility for conflict of interest, each group of stakeholders should identify their mandate in regard to propagation of the organization. Consequently, their actions and deliberations should always focus on fulfilling the recurrent mandate in order to improve the stature of the corporation in the market (Friedman & Samantha 2012). As earlier mentioned, the stakeholder theory has received immense interest from researchers and management experts. Their interest derives from the desire to understand the intricate structure of the theoretical premise and formulate a rationale for its application in organizational management. Through publications in journals and other avenues, experts have left a trail of information that analyses the theory and offers an opportunity for critique on its main ideas. According to Edward Freeman, the stakeholder theory embodies diverse aspects that relate to organizational management such as strategic leadership, organizational planning, theoretical approach, and corporate social responsibility (Laplume et al. 2008). The highlight of the theory is determination of the importance of stakeholders in guaranteeing the success of an organizational entity. The stakeholder theory incorporates diverse aspects of organizational management by ensuring that all stakeholder entities play their role in organizational management. Whenever there is discrepancy in stakeholder participation, organizations experience challenges that only serve as impediments to success and growth in the market. Good organizational leaders must devise frameworks for engaging their stakeholders in important areas that are critical to running of organizations. Such leaders should desist from the habit of learning theoretical approaches to management but ultimately fail to implement them in reality. Knowledge of theoretical management premises must translate to evident application within organizations. In the absence of such efforts, organizational leaders cannot achieve their mandate as drivers of strategic leadership and general organizational oversight. In other words, managers should internalize the principles of the stakeholder theory and always endeavour to apply them in the running of their organizations (Miles 2012). Another important component of the stakeholder theory is the inherent relationship between stakeholders in an organization. This area is very important because the recurrent interaction between stakeholders defines the inclination of the organization in all areas of operations. Stakeholders have a duty and responsibility to foster harmonious coexistence between them as a way of ensuring growth and progress. All stakeholder interests and deliberations must focus on value addition and propagation of ideals that bolster success in an organization. Stakeholders must further reconcile their interests by pursuing activities that compliment the overall desire for growth and dominance in the market. There are stakeholders who impact directly on the operations of an organization while there are those who are passively involved in the operations of an organization. Both levels of stakeholder involvement are critical because they contribute to actualization of basic organizational ideals and aspirations (Freeman 2004). Critics of the stakeholder theory fault its assumption that managers can cater for the interests of all stakeholders in an effective manner. They cite the complexity of interests and motivations that are held by different classes of stakeholders. For instance, they point out that the interests of employees cannot be similar to those of suppliers or clients. Therefore, they criticize the inability of the stakeholder theory to separate such interests for the purpose of efficiency in satisfying them. They also fault its insistence on negotiation as an avenue for conflict resolution. According to Charles Blattberg, organizations should foster conversations as avenues for solving differences of opinion and interests in regard to stakeholders. Although the stakeholder theory has been subjected to scrutiny and negative reviews, it is evident that it has revolutionized organizational leadership and management. The stakeholder theory has been applied in areas other than organization management (Kelly 2001). The Mid Staffordshire NHS Foundation Case The inquiry that targeted the mid Staffordshire NHS Foundation Trust sought to identify areas of concern with regard to its management. In doing so, the inquiry identified pitfalls that were responsible for mismanagement and poor governance. Most importantly, it identified issues that were facing patients in their quest for healthcare services from the foundation. Most of the identifiable challenges were attributed to the inability of its management board to actualize their mandate in an effective manner. There was evidence of disconnect between the board, patients, and the staffs of the board. Due to the apparent lack of cooperation and coordination, the foundation trust failed to live up to its expectations and therefore led to deterioration of services to the clients. The inquiry also unearthed a poor organizational culture that did not put into consideration the plight of patients and other stakeholders. In failing to foster appropriate organizational culture, the NHS Foundation Trust paved way for incompetence and high levels of mediocrity within its ranks. On the other hand, it condoned laxity among its employees, thereby leading to disillusionment and the unwillingness to ensure high quality in delivery of services. Poor organizational culture was also cited as a possible trigger for inconsistent communication patterns between its management and other relevant stakeholders. This led to poor financial management and skewed allocation of resources to the necessary areas of interest within its scope of operation. Needless to say, there is need for proper liaison between stakeholders in order to guarantee a holistic approach to management of resources and other key components of its operational threshold. It is also evident that the poor management at the trust is responsible for the dwindling levels of service delivery to patients. Failure to deliver quality services affects the credibility of the service provider and ultimately dents its image among contemporaries in the industry (Kelly 2001). In order to guarantee proper functioning in organizational entities, there is need for regulatory and monitoring structures that support surveillance of management and delivery of services. Such oversight functions as the core of an organization because it avoids instances where managers overstep their mandate. Regulation and oversight are also integral to dissemination of services to the consumers and also creation of organizational systems that support strict adherence to statutory provisions that suffices with regard to organizational practice and conduct in specific areas of interest (Kelly 2001). The public inquiry on the NHS Foundation Trust was instrumental to unearthing managerial inconsistencies that plagued the institution due to the inability of stakeholders to liaise and engage each other on issues that relate to management at the foundation trust. The NHS Foundation Trust exhibits an appalling level of mediocrity and inability to satisfy the demands of their clients and partners (Kelly 2001). It is important to underscore the collaborative nature of organizational leadership and management. Failure to consult extensively often leads to inconsistency in regard to delivery of services and realization of the vision and mission of an organization. Organizations must ensure that all stakeholders understand the nature and scope of their indulgence in matters that concern the operations of such entities. This is an important addition to proper management within organizations because it enhances the overall desire for achievement of ideals and aspirations that characterize the organization (Kelly 2001). The investigation on the NHS Foundation Trust identified areas that ought to have been corrected in a bid to strengthen the reality for service delivery and implementation of organizational goals. The identifiable areas of concern in the case study are indicative of organizational laxity and unwillingness to pursue interests that compliment delivery of quality services. An example of areas that precipitated poor delivery of its mandate is the general culture at the foundation trust. The inquiry identified the culture as laying more emphasis on income generation at the expense of qualitative delivery of services (Mansell 2013). It is not commendable for organizations to value monetary gain and disregard their duty to ensuring satisfaction among its customers. In fact, it is unethical for organizations to disregard consumer interests and aspirations in pursuit of profits. The foundation trust dipped into mismanagement because of the inherent cultural inclination towards profiteering to the detriment of service delivery and actualization. Poor systems of communication were also responsible for the decline of service delivery at the institution. Apparently, the management at the NHS Foundation Trust were preoccupied with manipulating information with a view to projecting a positive image for the organization (Mansell 2013). Any information that signalled negative sentiments was actively hidden to save the reputation of the organization. This practice led to the ultimate deterioration of service delivery and the ability to guarantee qualitative patient care. The organization was also culpable for not focusing on appraising their level and standard of service delivery to patients. It is necessary for organizations to foster the adoption of measures that look into value addition with regard to delivery of services to consumers. The foundation also performed poorly due to its willingness to condone mediocrity in regard to internal and external systems that support delivery of services (Mansell 2013). Propagation of mediocrity is also supported by poor systems and standards of communication within the organization. As earlier mentioned, communication is very important to the management of organizations because it guarantees adequate and appropriate dissemination of information. In the absence of proper channels of communication, it is impossible for organizational entities to guarantee retention of superior and qualitative delivery of services to their clients. Channels of communication are integral to realization of the core mandate in regard to organizational entities (Mansell 2013). The management at the NHS Foundation Trust was also found culpable for abdicating their duties in regard to monitoring and evaluation of the organizational performance. They failed to execute proper monitoring and as a result led to mediocrity and laxity. Apparently, the leadership at the foundation trust failed to appreciate their role in guiding monitoring and evaluation of the performance within its ranks. Monitoring and evaluation are important aspects in organizational management because they offer room for introspection regarding the overall delivery of the mandate. Through monitoring and evaluation, organizations get a chance to unearth areas that require further attention and also identify strong areas that should be safeguarded in an effort to retain high performance regimes within the organization (Mansell 2013). Stakeholder Theory in Leadership and Governance Stakeholder theory is known for its insistence on the development of elaborate systems that support leadership and governance in organizations. The aforementioned inquiry on the NHS Foundation Trust brought to the fore a number of issues that castigated the credibility of the state of leadership and governance in its ranks. Poor leadership and governance are often responsible for failings that manifest in most organizations. This state of affairs has led to the formulation of theoretical premises that offer an opportunity for organizational leaders to understand the internal frameworks that influence the likelihood for success with regard to leadership and governance in an organization (Friedman & Miles 2002). The stakeholder theory is an example of a premise that creates impetus for adoption and propagation of dynamic management strategies. The theory deviates from the traditional view that accentuated the importance of shareholding as the key determinant to the relevance with regard to organizations. Under the traditional setup, shareholders had the most important voice in the determination of various issues that regard leadership and governance in organizations. On the contrary, the stakeholder theory considers the shareholder as an entity among other stakeholders with interest in an organization. This theoretical premise impresses upon the need for collaboration and cooperation among all stakeholders to ensure proper leadership and governance in organizational entities (Friedman & Miles 2002). The principles of the stakeholder theory would have been helpful in forestalling the crisis that is evident in the NHS Foundation Trust. It is necessary for organizations to foster cooperation between the management and stakeholders. This theory is superior and relevant because it recognizes the importance of all stakeholders in contributing to the success of organizations. This particular case study had evident flaws that manifested in the leadership and governance of the NHS Foundation Trust. Failure by its management to recognize and involve all stakeholders in the decision making procedure contributed to failure in delivery of services (Friedman & Miles 2002). For instance, the management should have considered the implications of neglecting the need to consult patients in regard to the quality and relevance of the services offered at the foundation trust. Such efforts could have led to timely and effective identification of areas that require urgent attention. However, this could not have sufficed devoid of the adoption of stakeholder theory (Friedman & Miles 2002). The theory would have played a central role in enhancing adequate and proper communication between the organizations leadership and the stakeholders. In the absence of proper communication practices, the foundation trust cannot entrench its desire for success in offering relevant care and support to patients. The relevance of leadership and governance practices is well captured in the essence of the stakeholder theory. All stakeholder interests and deliberations must focus on value addition and propagation of ideals that bolster success in an organization. Stakeholders must further reconcile their interests by pursuing activities that compliment the overall desire for growth and dominance in the market. There are stakeholders who impact directly on the operations of an organization while there are those who are passively involved in the operations of an organization. Both levels of stakeholder involvement are critical because they contribute to actualization of basic organizational ideals and aspirations (Friedman & Miles 2002). The stakeholder theory incorporates diverse aspects of organizational management by ensuring that all stakeholder entities play their role in organizational management. Whenever there is discrepancy in stakeholder participation, organizations experience challenges that only serve as impediments to success and growth in the market. Good organizational leaders must devise frameworks for engaging their stakeholders in important areas that are critical to running of organizations (Friedman & Miles 2002). Such leaders should desist from the habit of learning theoretical approaches to management but ultimately fail to implement them in reality. Knowledge of theoretical management premises must translate to evident application within organizations. Organizational leaders should understand the relationship between formulation of theory and incorporation of such into the active threshold of practice within their jurisdiction. Therefore, formulation of theory should be accompanied by efforts that gear towards incorporation and implementation of the theories in regard to leadership and governance within organizations. This is only possible through active participation of all stakeholders in the process of decision making and implementation of policies within organizations (Friedman & Miles 2002). The case of the NHS Foundation Trust is a clear indication of the relevance of stakeholder theory in modern organizational leadership and governance. References Donaldson, T Preston, L (1995). "The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications". Academy of Management Review (Academy of Management) 20 (1): 71. Friedman, L, Miles, S (2002). "Developing Stakeholder Theory". Journal of Management Studies 39 (1): 1–21. Freeman, R (2004), Strategic Management: A stakeholder approach, Boston, Pitman. Friedman, L, Samantha M (2012) Stakeholders: Theory and Practice, London, Oxford University Press. Kelly, M (2001), The Divine Right of Capital: Dethroning the Corporate Aristocracy, San Francisco, Berrett-Koehler. Laplume, A Karan S, Reginald L (2008), "Stakeholder Theory: Reviewing a Theory That Moves Us". Journal of Management 34 (6): 1152–1189. Mansell, S. (2013) Capitalism, Corporations and the Social Contract: A Critique of Stakeholder Theory, Cambridge, Cambridge University Press. Miles, S (2012), "Stakeholders: essentially contested or just confused?". Journal of Business Ethics 108 (3): 285–298. Mitchell, R. K.; Agle, B. R.; Wood, D. J. (1997), "Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts", Academy of Management Review (Academy of Management) 22 (4): 853–886. Phillips, R (2003). Stakeholder Theory and Organizational Ethics, Newyork. Berrett-Koehler Publishers. Read More