Business and Society have a complicated relationship. Organizations make products or deliver services with the goal of making a profit. Human beings and social structures that humans create together make up society. Businesses and society are of an interactive system. Business firms participate in continuous interactions or exchanges with its external environment. Society and business make up a cooperative social system where each other’s actions affect one another.
In the stakeholder theory of the firm, all businesses have a purpose to create value for its diverse stakeholders. For these organizations to stick around, they must make a profit for their owners and, in addition, businesses must understand and take all stakeholders’ interests, power, and alliances into account and thus try to create different kinds of value for their stakeholders, whether for employees, communities, or others. Businesses must recognize who the corporation’s market and nonmarket stakeholders are.
Every business firm has economic and social relationships with society, whether they affect positively or negatively; are intended or unintended. Stakeholders are those who affect or are affected by the firm, whether they have a market relationship or not. Often with multiple interests in mind, the stakeholders can implement their economic, political, and other powers in ways that can help or defy the organization. Stakeholders may act independent or together to impact the companies. Modern corporations developed a range of complex, boundary-crossing departments that manage of interactions with stakeholders and society. For instance, Walmart has a huge impact on society and must effectively and efficiently deal with stakeholders interests. A number of vast factors mold the relationship between business and society. These include changing societal and ethical expectations, shifting public expectations and government policies, fast paced global economy, dealing with ecological concerns, and changing the transformational role of technology and innovation. Corporate strategy has to deal with expectations of all stakeholders and even society itself.
Chapter 1 Discussion Questions
1. The issue in this case is simply that Disney had a vision of making people feel like they are “in another world” while they were in Disneyland. Although, this interferes with companies coming into their territory and building affordable housing for people who work within the walls of Disneyland. Disney ultimately has the final say in the matter because of their continuous revenue stream for the city of Anaheim. This means that no matter what Disney will get what it wants. 2. The relevant market stakeholders include the employees, customers, suppliers, and creditors. The nonmarket stakeholders include the community, governments, and the general public. 3. Stakeholder interests
a. Employees – have a more affordable housing complex near Disneyland (support SunCal’s plan) b. Customers – have a fun and memorable time at Disneyland (most likely indifferent to the situation, but are affected indirectly) c. Suppliers – Ultimately make or lose money geared on the success of Disneyland (do not support SunCal) d. Creditors – Also rely on Disney revenue stream (do not support SunCal) e. Community – The city of Anaheim benefits with Disneyland tax payments (do not support SunCal) f. Governments – Same as Community
g. General Public – benefit from Disneyland revenue (do not support SunCal) 4. The employees obviously have the right to quit or abstain from working for Disneyland, the customers can choose to not come to the park, the suppliers really have no power seeing the Disneyland is most likely their main source of revenue, and the creditors can chose to finance elsewhere.
6. The best possible solution would be for SunCal to move their projected idea of building the affordable housing further away from right next door to Disneyland. The employees would be more than happy to agree to an affordable housing that is a couple of miles away than having to live outside of the city and commute into work. Everyone then becomes happy with the situation from this simple solution.