Corporate Stakeholders Essay Example | Topics and Well Written Essays - 1000 words

Corporate Stakeholders - leaven ExampleLastly, when we say product market - it comprises of primary customers, suppliers and so ontera There is an additional class of stakeholders that indirectly influences the performance of the company, and company cannot operate independent of it - these are the secondary stakeholders such as host communities, political science and other environsal groups in the society.The firm has its obligation to maintain its actions that balances the participation of the entire key stakeholder. distributively group of stakeholders has their demands that are against the demand of other stakeholders. Companies moderate to manage this trade-off in supporting integrity group over another in different decision making objectives. The primary expectations of shareholders and lenders are wealth enhancement and wealth preservation respectively customers look for product reliability at as lots lower price as possible, whereas, suppliers aim to receive the highe st prices for the items supplied and that too sustainable in the long run. The group of stakeholder working there look for secure and sustainable work environment, that is rewarding and stimulating and provides opportunities for career growth. Unions make do for ideal working conditions and achieving job security for the members. The secondary stakeholders focus in on protecting the environment and fulfilling concerns that relate to social environment. As the description earlier indicates that product market stakeholders are basically the non investor stakeholders and their claims from the anxiety are in the form of unuttered promises that ensures continuous and timely supply of products, product enhancement, regular customers etc. These claims are implicit because payouts on these claims are not quantified and stated out aloud. But these claims are squeeze by the companys existing financial policy. Cornell and Shapiro (1987) pointed out that these claims affect stock prices sim ilar to the investor stakeholders claims management therefore should cook its financial policy to achieve a balance between implicit claim stakeholders and the investor stakeholders. Taking into considerations these implicit claims it can be implied that contingent claim on an organizations financial resources might be amplified in boldness their rights are not properly addressed. These implicit claims can be exemplified by the following In January 984 when orchard apple tree came up with Machintosh computers, it promised (an implicit claim of competitive file servers) its customers that it will soon bring to the market the modern file servers that are the hard disk that can manage data of multiple computer machines at a single time. But then the Apple had no clue of the exact characteristics, price etc. The field of corporate finance has long been recognizing how these implicit claims affect the factors earlier mentioned this concept has been embedded in recognizing organization al capital equivalent to the current market value of all the firms implicit claims that the firm expects to dole out and organizational liabilities equaling the expected costs of honoring current and the potential implicit claims. Almost all of the stakeholders have criticized that balancing of stakeholders rights is not a fair mechanism with capital markets or investor stakehol