Evaluate the Influence Different Stakeholders Exert in One Organisation
I am going to evaluate the influence that stakeholders exert on Zotefoams PLC. I will be evaluating the following stakeholders: customers, employees, shareholders, suppliers, the government and owners. Customers Customers contribute to profit levels and turnover through buying products and services.
People are stakeholders in a company for financial reasons; customers do not want to have to spend an excessive amount of money to purchase a product, so if one of Zotefoams competitors can produce the same product for a lower price the customer may be tempted to change suppliers.
Without its customer Zotefoams would not exist, they survive through customer loyalty and their ability to attract new custom. To ensure that they get regular customers Zotefoams ensures that all of its products are the best on the market. Customer service is also held very highly. By offering these incentives Zotefoams are getting regular customers which bring in more profit which then can be used to help expand the business.
In the resent economic down-turn Zotefoams business customers have been demanding cheaper products, and with the risk of losing contacts worth millions of pounds Zotefoams has had to expand its manufacturing base with factories in the UK, USA and now in China. This diversity allows them created not only cheaper products but also more specialised one too. This has opened up a larger market for them which have increased their share prices by 50% in two years. This has all been brought on by the need to satisfy their existing customer and increase their potential one.
Employees Employee is any person hired by an employer to do a specific job. Employees are important as any other stakeholder because they have first contact with customers so if the customers want to ask a question about the organisation or about a product then the employees can help with that and that employees could also recommend products to customers which will bring in more profit. Employees must know about the customer service policy. If customers have a problem or an issue with a product or service then employees must know how to deal with it.
Zotefoams have business and public customer that require different levels of customer service. The advantage to having a customer service for the customers is that their needs and complaints will be responded to. In reality, there are several factors that influence how committed employees are to a company or organization. It has been proven that the more autonomy and responsibility that a job has, the less repetitive and dull that job also is and the more likely the worker is to enjoy and feel satisfied by the work.
Those individuals who feel stimulated, challenged and satisfied in their jobs are much more likely to be committed to a given work environment, company or organisation. Additionally, things like promotional opportunities, pay raises and chances for cross-training and advancement all encourage commitment. Those jobs or companies where there are fewer opportunities for promotion, advancement, and education tend to have higher turnover and less satisfied employees. In essence it is a very symbiotic relationship.
A business such as Zotefoams needs to employee a number of skilled employees to reach its business goals and likewise skilled employees would have the advantage of having a larger amount of employers to choose from. As a result the amount of influence employees have on a business is only (in my option) second to a business’s customer. Shareholders Shareholders are the owners of a company. They have the potential to profit if the company does well, but that comes with the potential to lose if the company does poorly. Shareholders can influence a business in many ways.
They can exert their influence by voting for particular directors or they can exert their influence by approving dividend payments at the AGM (Annual General Meeting). Shareholders play an important role in raising funds for organisations. So these figures create a great opportunity for all those who are looking for a profitable option to invest money. The main powers of the Annual General Meeting of shareholders are to approve and receive dividend proposals. An AGM (Annual General Meeting) is a meeting that official bodies and ssociations involving the public including companies with shareholders are often required by law to hold.
An AGM is held every year to elect the Board of Directors and inform their members of previous and future activities. It is an opportunity for the shareholders and partners to receive copies of the company’s accounts as well as reviewing financial information for the past year and asking any questions regarding the directions the business will take in the future. In reality (a company such as Zotefoams) the shareholders have little or no impact on virtually anything to do with the company.
Most companies have millions of shares outstanding and thousands of shareholders. The management generally makes all strategic decisions unless the decision involves raising funds through bonds or secondary offerings, along with potential mergers or acquisitions. Issues of that significance are presented to the Board of Directors by the management and decided by the Board. In general, management considers shareholders simply as investors, and that the shareholders are only concerned about the share price or dividend payout.
They know that it is virtually impossible for general shareholders to get 50% + 1 to change the board. That is not to say the company does not care about the shareholders. It simply assumes that the board and top management know the most about the company and therefore will automatically do what they believe is in the best interest for both the company and investor. External stakeholders-Suppliers Stock managers have trusted suppliers to supply them with the products they need to sell.
The suppliers should provide the products on time, however if not then stock managers will find new suppliers that are better than the ones they had previously. If stock managers and suppliers have a good relationship with one another then they would be happy to work with each other which means stock managers will have a reliable source of supplies and suppliers will have a reliable source of income. If suppliers are happy then they will be more motivated to help the business to achieve success and help the business run effectively. Suppliers must supply the stock managers with good quality products.
If however the products are bad quality then stock managers will find new suppliers and their previous suppliers will lose customers and they would get a bad reputation which means all their other customers will find new suppliers too. Zotefoams suppliers influence the business by making sure they have the right amount of stock delivered at the right time. If their suppliers do not supply high quality goods this would be a disadvantage. This could lead to a reduction of customers. The Government The government sets corporate tax rates for businesses so that they pay their taxes.
This way, a business can make its contribution towards the society. As a result, the government uses this money for economic growth and development. Paying taxes help these businesses to streamline their processes, as a result of more efficient infrastructure and management. The taxes paid also assist in supporting backward countries, so that overall demand of their products is not only restrained to UK, but includes exports to these nations too. Government laws are there to handle disputes, errors or poor judgment of a given person.
In any society, disagreement between employees can break down a healthy structure, so the laws are in place to attempt to guarantee equal rights to each member. Conclusion My conclusion is that there are a number of different stakeholders that hold different levels of influences on Zotefoams. But in my option out of all of Zotefoams (or any business) stakeholders its customer would hold the most influence, because after all a business cannot operate without its customers. By looking at a number of case studies (1) you can see a direct link between poor PR/ customer service and a company stock prices and sales.
In November 2011 Shares of Abercrombie & Fitch plunged more than 15% in one day resulting from a PR disaster. This is evidences that if a company do not reflect the wishes of its customer or delivers poor service/goods there can be a massive negative effect on the business. Another example of how customers can effect business operations is the disastrous speech made by CEO Gerald Ratner of The Ratner Group. After making a speech in which he jokingly denigrated the company’s products as “tacky” he nearly caused the company’s near collapse. The company’s stakeholders are very important to keep the business up and running.
A company’s stakeholders are all important but in handling its stakeholders, a business also has to accept that it will have to make choices. It is rare that “win-win” solutions can be found for key business decisions. Almost certainly the business cannot meet the needs of every stakeholder group and most decisions will end up being “win-lose”: i. e. supporting one stakeholder means another misses out. There are often areas where stakeholder interests are aligned, where a decision can benefit more than one stakeholder group. In other cases, there is a clear conflict of interest.