Question

Depending on actions taken by a corporation, some stakeholders will be positively affected and others will be negatively affected. Explain with example

Answer 1

Depending on the actions taken by a corporation some stakeholders will be positively affected and others will be negatively affected. Every decision impacts stakeholders and once the organisation decided to make some changes or different strategy it impacts stakeholder differently.

Here is a decision as example  - Improve customer product quality and feedback process

• A decision like this can be taken by senior leaders or the owners as they are important stakeholders. The decision to improve quality and services must be from the long-term benefits for the corporation and increased profitability in future.
• This decision is going to have a positive impact on current and future customers. The services will be much improved, feedback will be taken instantly and will lead to better cash flow for the business in future and earn a better profit.
• This may impact the employees as training needs will arise, more processes will be introduced to the system and a certain level of change management has to be adopted. The consistency in service will make the work more organised and also stressful for the employees.
• The motivation of employees, better compensation, training and empowerment will be challenging areas but the focus will have to be put.
• It may have an immediate negative impact on business partners - since the firm is looking at it from ling-term growth revenues and scale in current operation might decrease leading to less return in investment or stocks in the short term.
• It may also have a negative impact on suppliers and other stakeholders as the company stand to improve the quality they might look at better collaboration and synergy areas.

In the overall context, any action taken by corporate will have a positive and negative impact on stakeholders. Many CSR viewpoints are taken into consideration these days which impacts both the sides.

The decision related to numerous things like compensation plan, contingency plan, CRM focus, new markets expansion, collaboration and joint ventures all have a diverse impact on various stakeholders.

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