'An explanation of the importance in the relationships between the corporate citizen and its stakeholders.'
In the field of corporate citizenship, the major argument has been about stakeholder responsibility towards the firm and other stakeholders. There are many ways to discuss this issue, for example considering the right and responsibility of corporate citizens, social responsibility of stakeholders in their own operations and practices. This report aims at highlighting the stakeholder responsibility and corporate citizenship rights and responsibility and how they relate.
Corporate refers to a large company or group authorized to act as a single entity and recognized as such in law. Citizen can be defining as a legally recognized subject or national of a state. According to business dictionary, "corporate citizenship is afirm'ssense ofresponsibilitytowards thecommunityandenvironment(both ecological and social) in which itoperates, and drawsresourcesand sustenance from". Corporate social responsibility "is the idea that organisations should be held accountable for the effects of their actions on people, their communities and the environment" (Worthington & Britton, 2009). Firms can gain competitive advantage by investing in CSR. Corporate citizens have rights, responsibility and relationship.
A stakeholder is a group of people that have interest in the activity of a business; they also have the willingness to influence the business. They can affect or can be affected by the organisation's actions, objectives and policies. The key stakeholders in an organisation include customers, creditors, directors, owners (shareholders), suppliers, employees, unions, government, and many more. All stakeholders are not equal and different stakeholders are entitled to different consideration. Stakeholders are sometimes called to discuss and to cooperate with private sectors playing one of the most imperative roles in helping along companies responsible behaviours. In such a way they became complete actors of corporate citizenship policies and programs. Stakeholder role and responsibilities are extremely important and difficult to define.
Stakeholder Roles and Responsibilities: An Alternative Approach
"Corporations have gradually become the most powerful institutions on the planet, so it makes sense that they act in a sustainability perspective and they play a political role in the local and global context" (Goodstein 2007). The responsibility of companies does not only deal with their ability to produce employment and wealth. Company's practices, policies and operations should incorporate social and environmental concerns taking into account their effect on stakeholders. Corporate citizenship involves more than meeting the discretionary responsibilities associated with volunteerism, community relations, and social good. It is more about cultural, identity and operational patterns of the organisation. Taking this into account, one of the most important things is every corporate citizenship policy should be represented by the relationship that the firm established with its stakeholders.
"The firm and its stakeholders are indeed embedded in a network of relationships in which stakeholders are and have to be co-actors of corporate citizenship policies, strategies and programs and not only a public to be in relation with"( Freeman, R. E. 2006). This implies that corporate citizenship policies development and implementation is also a stakeholder responsibility. Stakeholder roles and responsibilities are easily identifiable in both the two dimensions of corporate citizenship: the compliance i.e. state of complying with a wish, request or demand; agreement .and the proactive ones i.e. identifying and exploiting of opportunities and taking necessary options against potential problems and threats. Stakeholders also have the possibility to require, encourage and monitor companies' compliance with norms, rules and standards beyond a bureaucratic approach. They could also help in supporting the civil, social and environment development.
Stakeholder Conflict: A corporate Perspective
"Corporate decision making is easiest when the interests of these stakeholders coincide" (Deanne Julius, 2007) This actually means that both employees and customers are likely to live locally and all stakeholders interest for the firm should favour the local community activities and to avoid the danger of pollution or some other negative externalities that would damage the organisation reputation with the local staff and customers. A typical example is the oil shore in the eastern part of Nigeria; this is really causing a big problem for the community because of their heavy pollution. This has led to staff captured as hostages. No matter what an organisation does, they need to care about people around them, if they are been affected positively or negatively. This will help them in developing a very good relationship. Local community groups are often the most resistant of all stakeholders to change. For example, in Britain, obtaining a local, planning permission for plant expansion can take longer than the construction itself. If the project is controversial, it consumes large amounts of management time and lawyers' fees to make the case for it.
"Globalization tends to cause stakeholder interest to diverge" (Deanne Julius, 2007). This party because each stakeholder group become more different. As globalization gains strength, firms are increasingly subject to stakeholders conflicts. These conflicts make it more difficult for managers and boards to make it more difficult for managers and boards to take decisions that can be supported by all stakeholders. In most competitive business, customers are one of the most important stakeholders. The customer's choice of one firm's product or services over that of other firms is what creates the revenue that is being used to pay the staff, dividends of shareholders, the taxes and many more. Firms must make decisions that attract and hold customers.
The present state of Corporate Citizenship
"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch on incredulity... it was the spring of hope" (Charles Dickens , 2009) . The present state of business news, signals significant opposable realities of our age like the tale of two cities. This focuses more about GM and Toyota. What's most intriguing about their story is that the company that made the least investment in corporation social responsibility (CRS) during the economic recession are bankrupt. The two comparison companies did just opposite: they amplified their CSR and sustainability commitments. In the 21st century, lens of sustainability could turn out to be the biggest business opportunity. But very few business leaders could see it or make it pre-eminent part of corporate strategy.
"The confluence of political changes, business pressure and natural disasters created a new watershed of dialogue ideas and progressive thinking about corporate social responsibility in china" (Kristian Darigan and Jim Post, CRS movement in China, Cited in Cooperrider and Fry 2009). Corporate citizenship will surely become more important, not less, during this time economics upheaval, but it all depends on the corporation's ability not only to expand its definition of stakeholders but also to turn these key stakeholder relationships into sources of imagination, innovation and inspiration. The Role of Third-party organisations', pick up the point that stakeholder relationships will be defining feature of the newer mixed modes of regulatory processes, especially where there are predictable market failures requiring larger systemic collaboration.
Ways to Take Advantage of Good Corporate Citizenship
"Consider corporate giving as a line item in your marketing budget and selecting a non profit partner with an active membership to benefit from an in store event?" (Susan Morgan, 2009). Work with organisations supported by individuals who fall into your target market. Attending events at all of major museums in town to observe who supported you and if the supports are part of the organisation target market. Almost everyone has a story of events that bombed even when a non profit partner that appeared to have the right customers was involved. This might help the organisation in gaining competitive advantage.
"Points to consider before partnering with groups and partner with organisations where the relationships will be mutually beneficial. Will the organisation provide an invitation list of key supporters for the event?" (Susan Morgan, 2009) This focuses on promoting events through website, newsletter and meetings. Board members need to attend the events and encourage supporters to buy on behalf of the organisation. Looking for organisation where one can build long lasting relationships and the ones that have strong members who comes out to support events held on their behalf. It takes a lot of trial and research to come up with genuine partners. This will help build the relationship with the community.
Insights from the literate suggest that corporate citizenship has been a much debated issue in the last few years. Stakeholders play as co-actors of corporate citizenship policies strategies and programs. On this perspective, stakeholders have a specific responsibility promoting responsible business practices. Stakeholders' roles and responsibilities are extremely important and problematic. When stakeholders ignore their responsibilities, the cost can be extremely high. Most of the times, Stakeholders do not know their responsibilities as corporate citizenship actors.
It has been argued that stakeholder theory is ''managerial'' and advocates the attitudes, structures, and practices that should be taken together in constituting a stakeholder management philosophy. The theory goes beyond the purely vivid observation that organizations have stakeholders, which carries no direct managerial implications. In addition, the view that stakeholder management adds to successful of the economic performance, although widely believed is inadequate to stand alone as a basis for the stakeholder theory. Indeed, the most thoughtful analyses of why stakeholder management might be carelessly related to corporate performance eventually resort to normative arguments in support of their views.
Understanding what is happening in companies today with respect to their corporate citizenship is very vital. While research on corporate social responsibilities has been under way for over 30 years, the promising understanding of the integral nature of corporate citizenship, the reality that corporate citizenship cannot be divorced from practice is pretty new.
Charles Dickens (2009). A Tale of Two Cities: Cited in Cooperrider and Fry. Is Corporate Citizenship Spreading and Shrinking, 35, autumn, pp 3-6
Deanne Julius (1997). Globalization and Stakeholder Conflicts: A Corporate Perspective. International Affairs, 73/4, pp 450-465.
Freeman, R. E. (2006). A new approach to CSR: Company Stakeholder Responsibility, New York et al, pp 9-15
Goodstein J.D. Wicks A. C. (2007). Corporate and Stakeholder Responsibility: Making Business Ethics a Two-Way Conversation, Business Ethics Quarterly, 17, 3 pp. 375-37 8
Ian Worthington & Chris Britton (2009), The Business Environment, ( 6th Edition) Harlow: Pearson Education
Kristian Darigan & Jim Post (2009). CRS Movement in China: Cited in Cooperrider and Fry. Is Corporate Citizenship Spreading and Shrinking, 35, autumn, pp 3-6
Susan Morgan (2010). Ways Stores Can Take Advantage of Good Corporate Citizenship. Marketing Mojo, winter, pp43