Every business organization has its major stakeholders which include the owners or shareholders, the board of directors, the employees, the government, and this also goes as far as including the public. The regulations within the product market such as tariffs and payment of taxes have a stronger effect on the performance of a business. In the product market, there are many things that could take place. Checks and balances need to be practiced or applied by the regulatory authorities in order to avoid oppression and protect consumers from ill practices by the manufacturers and the suppliers (Freeman & Evan, 1990, pp.337–359). There is a direct connection between the stakeholders’ claims and what goes on in the product market. This is because the actions taken by the stakeholders have a proportionate effect on the business practices in the product market by the concerned firm. Some of the actions could span from the type of product to be sold in the market to the prices charged for such a product. There are also other forms of authorities that have an interest in what a company does within a given product market. These could be in form of environmental bodies, food and drug regulation authorities, chambers of commerce, and the association of manufacturers, among other players who stipulate the policy an organization has to abide by.
This paper critically examines the connection that exists between the claims of stakeholders and the product market and will try to illustrate this by explicit examples.
Introduction
Every business organization has its major stakeholders which include the owners or shareholders, the board of directors, the employees, the government, and this also goes as far as including the public. The regulations within the product market such as tariffs and payment of taxes have a stronger effect on the performance of a business. In the product market, there are many things that could take place. Checks and balances need to be practiced or applied by the regulatory authorities in order to avoid oppression and protect consumers from ill practices by the manufacturers and the suppliers (Freeman & Evan, 1990, pp.337–359). There is a direct connection between the stakeholders’ claims and what goes on in the product market. This is because the actions taken by the stakeholders have a proportionate effect on the business practices in the product market by the concerned firm. Some of the actions could span from the type of product to be sold in the market to the prices charged for such a product. There are also other forms of authorities that have an interest in what a company does within a given product market. These could be in form of environmental bodies, food and drug regulation authorities, chambers of commerce, and the association of manufacturers, among other players who stipulate the policy an organization has to abide by.
This paper critically examines the connection that exists between the claims of stakeholders and the product market and will try to illustrate this by explicit examples. It will borrow heavily from the literature available in this field.
Analysis
A variety of stakeholders possess the right of impacting and influencing the decisions being made by any company in which they have an interest in. this is because they do command some respect directly from the companies in question. Based on this influence the stakeholders exert on firms, the policies formulated by businesses must be able to fully fit the demands of these stakeholders for successful business operations to be realized. We could consider stakeholders as all the groups, individuals, shareholders, and other organizations that have a relationship with the company at hand in one way or the other, whether directly or indirectly. Stake in this analysis is used to mean a share or portion within the business. The basic description in this case is thus based on shareholders, employees, government, partners, and all investors. They have an effect on the daily operations of a business and other areas that the business has an effect on. The stakeholders could also include the individuals and organizations that the business will not operate without them (Donaldson & Preston, 1995, pp.65–91).
The stakeholder claim come from the fact that each stakeholder is entitled to something that they have an interest in as far as the organization is concerned or is able to make some specific demands from the organization that they have an affiliation to. Some of the claims that stakeholders might have over an organization could range from dividends claimed by shareholders; remuneration and insurance covers that are claimed by employees; the quality of products which is claimed by consumers, as well as the claim on having favourable prices and be ensured of constant supplies (Venkataraman, 2002, pp.45–57); and the interest rates that are claimed by financiers and investors of a given firm on their capital invested. The shareholders of a company have various demands such as coming up with new products in the market, penetration of new markets by their products, and may also demand that the declining products be eliminated from the market. They also end up demanding more dividends and question the level of performance of their firm. To meet these demands, firms have to exert themselves strongly into the product market with the view of increasing sales so that the demands of shareholders are met (Werhane, 1998).
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- Quote paper
- David Moss (Author), 2011, The connections between stakeholder claims and the product market, Munich, GRIN Verlag, https://www.grin.com/document/270816
