BUSINESS FUNCTIONS

Business Functions

Business Functions

Introduciton

A stakeholder is any individual or group that has an interest (vested or not), in a company. Some people equate a stakeholder with a shareholder of a specific company. These people would be right, for the shareholder has a vested interest in the well being and profitability of the company. Some other groups that could be qualified as stakeholders are the management, employees, and the lenders. More abstractly the customers, the community, and the Government also have interest and could be considered stakeholders.

The organization has a great responsibility to each and everyone of these groups. First and foremost, to the shareholders the organization has a duty and responsibility to make a profitable return on their investments. For the employees (including management) the company has an obligation to provide a clean and safe working environment, a place of work that pays wages for services rendered, offers benefits, to provide job security and job training, and above all provide an arena of mutual respect and understanding. An organization also has a responsibility to provide its customers with quality products which are safe and comply with all of the specified government regulations. Any company has a great number of groups which it needs to satisfy, this is a difficult task to do, and often times is impossible to fully do, but as long as the business is making its best effort, none of these specified groups can earnestly ask more.

In their credos and mission statements most companies claim to strive to satisfy all of their stakeholders. In the end striving is all that most companies do, but that's not to say that their efforts and pure and well-built, rather that satisfying every group is a near impossibility. For example if a company purchases cheaper materials their profit margin may go up satisfying and even exciting the shareholders but upsetting the customers who are in turn offered a sub-par product. So the question then becomes what purpose or role does the social contract truly play.

The social contract (or credo) should in a word be a guideline. What it should not be is a piece of paper that is written down read once and then stored away and forgotten about. Their purpose should not be to better the bottom line but rather to better serve the company as a whole. Social contracts should explain to the employers the way in which the company will run and in doing so exclaim to the customer the type of product and service which they can expect. For example, Tom's of Maine, a company specializing in natural personal care products in their mission statement they make sure their customers know what it is that they are truly attempting to accomplish when they state, "At the heart of our Company Mission is our belief that human beings and nature are inherently worthy and deserving of our respect. Here are some of our current efforts to "live the mission."

So in progression the next question becomes, can a company actually ...