The Role That the Stakeholder Theory in the Management of the Organization
Various theories have been developed to help in the development of an efficient management scale and promoting how the organization runs towards meetings its great success and the setup objectives. The roles of the management theories that have been developed today are enormous, and they are some of the most applied concepts to allow and develop the smooth flow of ideas and activities within the work setting. One of the major theories that are now applied in running various high-end organizations across the globe is the stakeholder theory. The stakeholder theory is a concept that is used to manage the organization and develop how the organization runs towards achieving its core objectives and capabilities with ease. The stakeholder theory provides one of the most inert ways of managing the organization development and also the use of the business ethics to create one of the most inert concepts of managing the organization distress and any other factor that may affect the morality, the social responsibility and the market economy.
The basis of the theory was that the organizational structure is only subject to development and the overall development of the organization. The stakeholder theory provides one of the best methods of managing the organizational setting and creating a new framework of initiating development for the overall stakeholders Milton Friedman argued that the main purpose of the business is to make profits. However, the profits are to create an overall management scale that will benefit the entire stakeholder scale in the organization. The stakeholder's theory provides that that the stakeholders are some of the major people who should benefit from the business and the success of any business is based on their demand and on how they best meet the needs and the overall outlook of the stakeholders.
The stakeholder theory provides that the stakeholders can create either the success or the failure of the business and any system that will affect the vulnerability and the general outlook of the business can be effectively controlled. It acknowledges the stakeholders as the critical people in any industry and who their interests must be given a higher priority in a business setting. Therefore, for any business to succeed and ensure that it maintains its face in the business world. The executives must strive to keep the interests of the customers, the supplies, the employees, the general community and all the stakeholders to move in the same direction. The stakeholders are the major parties and the major force behind the success or the failure of the business entity.
The stakeholders hold a higher ladder in the development and the success of the organizational setting. The basis of the stakeholder theory and its significant applications can be used to raise the standards of the organization and to allow for the well-developed competitive scale within the organization. Stakeholder theory provides the basic concepts of managing the organizational setting and also providing a perfect competition scale for the organizational overview (Cordeiro & Manish 847). The stakeholder theory is one of the basic concepts behind the success of some high-end companies across the world. Various high company profile across the societal settings after the real beneficiaries of these and have developed one of the highest success capability that has boosted the moral and the overall productivity of the company.
According to JIM, the success that Google LLC has continued to enjoy over time is due to its maximum utilization of the components of the stakeholder theory. The basis of the same is to allow for the acquisition of all the products, goods and the entire services that are needed to propagate the business ideas. The stakeholder theory acknowledges that the supplies provide the most important benefits to the business and hence all the suppliers need to be accorded with the highest beneficial terms that will see them achieve all their desired needs. The suppliers also act as the ambassadors for the business, and they are the one who helps develop all the inherent mechanism of trade and also all the factors of business production (Jones 425).
Manufacturers are also the other major stakeholders in the development of business ideas. The manufacturers provide and create the major goods that are needed to facilitate a trade idea and to ensure that there is a consistent supply of goods that will reach the market on time. The significance of the Stakeholder Theory Stakeholder theory is very applicable in the business world. It is one of the major factors that can help initiate positive economic growth within the business environment and also that can help provide all the inherent factors that can help in promoting positive business growth. The stakeholder theory has a wide ray of application and which can be used to ensure that the organization is functional and well suited toward achieving all its core demands in the business world.
The stakeholder theory provides the business with an opportunity to grow. It is based on the ability of the business to grow, sustain all its inherent forces that are needed to promote the positive growth of the business and also develop a framework that will allow for the maximum utilization of all the resources that can make the business grow towards meeting and achieving its inherent roles. It is one of the concepts that ensure that there are higher innovations scale up the business environment and also the massive growth of the businesses as the same helps in ensuring that the business is competing effectively towards achieving and meeting all its needs and demands. Therefore, the application of shareholder theory helps the business to compete effectively with other businesses within the same setting.
This is because the stakeholder theory is the mother of invention, positivity and the overall ethicality and ethical promotions within the business scale (Cordeiro & Manish 841). The role that ethics plays in play in the business scale is enormous, and it is the basic concept that can help manage the business and also create the most robust way of promoting sales and also the competitive scale of the enterprise. Ethics and moral concepts in the stakeholder theory help promote the idea of healthy competition in the business environment and also help in the development of a more accommodative way of doing business (Freeman 235). Wicks, and Bidhan Parmar. "Stakeholder theory and “the corporate objective revisited. ” Organization Science 15. Jensen, Michael C. "Value maximization, stakeholder theory, and the corporate objective function.
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