Stakeholder Management Questions

(4)

1. Who are our stakeholders (“stakeholder identification”)

2. What are your stakeholders’ Stakes

3. What Opportunities and challenges do our stakeholders present to the firm

4. What responsibilities (economic, legal, ethical) does the firm have

 Gives a company the right to fire you without reason

1. Public Policy- Refusing to do something illegal

2.  Breech of contract- 12% of people have contracts

3. Breech of good faith- (Fairness) – if everyone is doing something and you are the only one who gets singled out for it

Views stakeholders as a factor to be take into consideration and managed while pursuing profits for shareholders

How a company governs itself (who hires who/who's in charge)

Charter

Shareholders (owner)

Board of Directors (owner)

Upper Management (CEO, CFO, etc) (owner)

Management

Employees

Saw other major groups

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Tax deductibility of interest

Doesn't dilute control of the firm

Lower cost of funds

Increased probability of financial stress

Use up potential debt capacity

-Taking on a partner

-Form a corporation and sell stock

Shareholders

(stockholders, investors, owners)

-Limited Liability

-Voting rights (common stock)

Assets = liabilities + equity

-what you own = what you owe + what you owe yourself

-Stuff = other peoples claims to stuff (non-owner) + your claims to stuff (other owners)

sales - expenses = profit

(net income)

- Statutory rights (government laws)

- Collective barganing rights (union contracts)

- Enterprise rights (promises from the business)

(remember * SEC)

Statutory laws

(4)

- Civil Rights Act

- Age Discrimination Act

- Equal Employment Opportunity Act

- Americans with Disabilities Act

Model Employee Termination Act

(META)

Must show good cause for firing someone

(only adopted in some states)

-  The government must respect a person's legal rights when the government deprives a person of life, liberty, or property

- Includes an individual's right to be adequately notified of charges or proceedings, and the opportunity to be heard at these proceedings

(alternative dispute resolution)

- Hearing Procedure ( Allows employees to be represented by an lawyer or neutral party)

- Ombudsman ( A troubleshooter helps to investigate and reach settlements for employee complaints)

- Peer Review Panel (Fellow workers come together and review a situation)

Sarbanes- Oxley

(whistleblower protection)

-Comprehensive coverage for all employees of publically traded companies

- Protection for harassment

- Corporate conduct that could threaten shareholder value

- Timely responses

- The right to a jury trial

- Lessened burden of proof on employee

- Compensation for judicial fees

- Criminal felony penalties for retaliation

- Audit committees required to have complaint response procedures

-  Administrative is shrinking and strategic is growing

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Library website

-Hoover

-Marketline

-Business source complete

 People are highly different resources

- They can look at the same thing differently

- Managers need to see multiple perspectives

- Not just about what you see first

Strategic decision making 

(businesses buy from one another "IBM buying intel chips)

Based on emotions

(mom buying groceries for family)

- Encourages competition

- Regulatory agencies (FDA, FTC, Consumer Product Safety Commission)

Price - Cost

Product - Consumer

Promotion - Communication

Placement - Convenience

- Penetration

- Skimming

- Premium

- Low price leader = offer product at the lowest price

(used in heavy competition)

- Loss leader

(sell something for a loss to make people spend more)

Example: Wal-Mart

-Selling high then low

(used when there is little competition and high demand)

- Used on unique products 

-Maxamize short term profits

- PR (good press)

- Personal Selling (face to face)

-Advertising (paying media)

- Product Promotion (displays, giveaways, samples)

- Customer Satisfaction

-Target market

-Customer needs

-Communicate both ways

(Long-Term profits through customer satisfaction)

The internet changed this

(information shifted from seller to buyer)

-Defined by sales

-Sell and promote

(Short-Term profits through sales volume)

Product Life Cycle Stages

(PLC)

-Development (no sales because product isn't released)

-Introductory

-Growth

-Maturity

-Decline

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Value = benefits / cost

(price does NOT always equal cost)

Risk vs. Reward

(highest-lowest)

-Common stock (voting rights)

-Preferred stock (NO voting rights)

-Unsecured debt (debenture)

-Secured debt

SOX

Section 1

Public Company Accounting Oversight Board

(Peek-a-Boo)

SOX 

Section 2

SOX

Section 3

SOX

Section 8

- Limits non-auditing services of auditors

- Enhances financial disclosure

-CEO's and CFO's certify financials

-Whistleblower protection

-Code of ethics disclosure

- Government regulation to protect owners

- Environmental issues

- Potential Employee

- No where else to put them

(If they CAN go somewhere else PUT THEM THERE)

Example: girl who was potential employee, but also a customer (customer)

What level of critical thinking and who does strategic approach relate to?

What level of critical thinking and who does multi-fiduciary approach relate to?

Pragmatic Performer

Combination of Freeman and Friedman

Corporate strategy

Business Strategy

Functional Strategy

Cost leadership

Differentiation

Focus

(supply chain) make/buy

Facility location

Facility Layout

Materials used in planning

Structural

Infrastructure

Product oriented

(High volume/low cost, assembly line, product is made then the order is placed)

Process Oriented

(Low volume, more flexible, order is placed then the product is made)

Big companies putting out the lowest cost

Wal-Mart

Small market / niche

May have low cost, high differentiation or both

Indemnification

Reimbursement 

Loyalty

Obediance

Accounting

Notifiaction

Reasonable Care

1. Voluntary offer and acceptance

2. Legal

3. Competency (of age, not mentally ill)

4. Consideration (mutually beneficial, not a gift)

Is it legal

Does it seem fair

How does it make me feel about myself

Looks for one correct answer

Doesn't get it

"what feels right"

Stacks the information to support their side

Acknowledes other points but ignores them

jumps to conclusions

Evidence logically supports their claim

Balances all the information

Never makes a decision

Looks from multiple perspectives

Forms a logical conclusion

Looks at multiple view points

Incorporates others views

Does not consider the long term

Constructs knowledge and moves towards a better decision over time

Anticipates what will happen in the future

Develops contingencies 

World - 6.8 Billion

US - 300 million

China - 1.3 billion

Adv. - Easy to start / Simple tax rules

Dis. Adv. - Unlimited liability / limited growth/ limited resources

Adv. - No special taxes / more resources / share the load

Dis. - Unlimited liability / split of profits/ disagreements

Adv. - Limited liability / access to $ / easy to transfer ownership / separation of owners and management 

Dis. - more costly to form / must have accurate financial records / dividends taxed twice / board conflict /separation of owners and management