Stakeholder management - Essay Example

? Stakeholder management Stakeholder management is a central part of any organisation. Stakeholders act as agents, sponsors and partners in the business strategy and change process. Stakeholders include the customers, employees, suppliers, creditors and the society in general. Stakeholders interests differ from those of the shareholders thus organisations should balance the two conflicting interests in order to ensure long term growth and survival of the business. This paper will discuss stakeholder management at Unilever and how the stakeholders have responded to the approach. Stakeholder management at Unilever Introduction Stakeholder management ensures that all those affected by the decisions of the company are considered in the decision making process (Huber & Pallas, 2006). Examples of stakeholders include the employees, the government, the suppliers, creditors, trade unions, customers, and the general community. On the other hand, shareholders are the real owners of the business since they have provided the capital thus their major interest is maximise their wealth through increased profitability and share prices. According to the modern stakeholder management theory, managers are considers as agents of the stakeholders. Stakeholders may be individuals or constituencies that contribute either directly or indirectly to the wealth creation activities of the firm and who also act as potential beneficiaries or risk bearers depending on the strategic decisions made by the management. Stakeholder management is therefore geared at developing and implementing organisation-wide practices and policies that address the needs, concerns and goals of all relevant stakeholders (Huber & Pallas, 2006). One of the leading companies in stakeholder management is Unilever. The company’s brands aim at assisting billions of people improve their health and wellbeing. Some products include affordable bathing soaps, ice creams and luxurious shampoos that care for the households. Some brands such as Lifebuoy, Omo, Blueband and Sunlight have attained global recognition and customer loyalty. Sustaining close relationships with stakeholders is one of the priorities of Unilever. The management of stakeholders involves building and strengthening relationships with all stakeholders through identifying the stakeholders’ needs and monitoring the changing needs. The company has implemented the Sustainable Living Plan that enables the company identity the needs of the stakeholders, diverse tastes and provides information on new products (Kazmi, 2008). The company operates consumer care lines, websites and campaigns that aim at collecting information from consumers. The company has strengthened relationships with the civil society and local governments through engaging the governments on matters such as nutrition and public policy. Unilever has partnered with non-governmental organisations such as Oxfam, UNICEF and World Food Programme in improving the hygiene, sanitation and access to clean drinking water thus satisfying the interests of the local communities. Unilever has addressed the interests of the direct stakeholders such as the customers, suppliers, employees and market partners. For instance, employees receive fair salaries, bonuses and commissions for their efforts in the organisation. Unilever treats all employees with dignity and respect and ensures individual interests are aligned with the overall strategic objectives of the organisation. Employees are assisted with credit facilities such as mortgages, short term loans and sick leave pay that also extend to the immediate dependants. The company has improved the working conditions through implementing properly documented health and safety policies and procedures that aim at reducing work related accidents. The job design and career growth opportunities aim at ensuring all workers attain self esteem and self actualization through exploiting their full potential. For the suppliers, Unilever has business policies that ensure equality in business opportunities and timely payment of the suppliers for the raw materials procured by the organisation (Polonsky, 2005). Unilever is committed to operating within the legal framework and paying taxes to the local governments. The company assists the governments in community projects that aim at ensuring sanitation and improving the welfare of the disadvantaged population. The company utilizes the scarce natural resources such as water in an efficient manner. The company has reduced the carbon dioxide emissions through clean manufacturing technologies that also minimize the toxic waste disposal in the environment (Bourne, 2009). For the customers, Unilever aligns their interests with those of the shareholders by ensuring that customers receive value for their money by providing them with high quality and innovative products. The company prices are reasonable and include discounts and after sale services that aim at addressing the complaints of the customers. The company products are health sensitive and aim at improving overall welfare of customers (Mullins, 2001). Unilever manages the stakeholder interests through first analyzing the needs of each category of stakeholders and creating a stakeholder matrix that shows the level of influence of each category to the success of the organisation. In addition, the company engages in stakeholder information communication especially on planned business strategies such as diversification plans and new product development. The company has also signed numerous stakeholder agreements with suppliers, creditors and employees in order to align the expectation of the stakeholders with those of the shareholders (Bourne, 2009). Other the other hand, Unilever has ensured that shareholders receive adequate returns for their investment through pursuing high growth and long term strategies that aim at maximising the value of the firm. The company is committed to balancing the economic performance with the social contribution in the society through catering for the needs of shareholders and stakeholders (Huber & Pallas, 2006). Due to excellent balancing of the stakeholders and shareholders interests, the different stakeholders have responded well to the management practices. Unilever has attained high employee retention due to equitable pay and equal employment opportunities. The company has minimized the number of work related accidents and legal suits due to non-discriminatory work policies that prohibit all forms of harassment. Employees perceive themselves as owners of the organisation due to the share ownership plans, commissions and bonuses that are paid annually depending on their performance and the economic performance of the company. Cordial working relationships in the organisation have reduced work related disputes and go slows thus ensuring efficient utilization of the available resources (Bourne, 2009). The company has attained industry leadership position due to brand loyalty. For instance, 12 of the more than 400 brands generate more than $ 1 billion in revenues each annually. The company has enjoyed brand loyalty due to health sensitive products, innovative brands and timely response to customer complaints (Mullins, 2001). Conclusion In conclusion, the suppliers have increased their commitment to the provision of high quality raw materials thus minimizing the instances of production stoppages. On the other hand, strategic business partners such as distribution stores are satisfied with Unilever commitment in the provision of high quality products. Unilever has enjoyed a stable external business environment due to its social responsibility initiatives in the surrounding communities. The surrounding communities are willing to offer labour and purchase Unilever products due to the social initiatives that aim at reducing poverty and ensuring sanitation. References: Bourne, L. (2009). Stakeholder relationship management: a maturity model for organisational implementation. Burlington: Ashgate. Huber, M & Pallas, M. (2006). Customizing in stakeholder management strategies: success concepts for long-term business success. New York: Springer. Kazmi, A. (2008). Strategic management and business policy. New Delhi: Tata McGraw Hill. Mullins, L.J. (2001). Management and organisational behaviour. London: Prentice Hall. Polonsky, M.J. (2005). Stakeholder thinking in marketing. Bradford: Emerald Group Publications. Read More