Changes in Stakeholder Expectations of Firms - Case Study Example

? Corporate Sustainability Contents Changes in Stakeholder Expectations of Firms 3 UPS Response to Stakeholder Expectations 3 Key Performance Indicators (KPIs) 4 Benefits of the Corporate Sustainability Report 5 Stakeholders Benefits From the UPS Initiatives 6 Reference 8 Changes in Stakeholder Expectations of Firms This case analysis aims at examining the managerial capability of UPS 2009in terms of sustainability and corporate social responsibility. Until a few years ago, stakeholders were exclusively referred to those people who has stakes or shares in a particular company. In the current business environment, a stakeholder is anyone who is affected by the actions of the business or has an interest in the business. In case of initiatives such as organizational change, a stakeholder can be regarded as any individual whose support, participation of decision might have an influence on the outcome of that initiative. In short any person who influences an organization and gets influenced by any change in the organization can be referred to as a stakeholder. In Case of UPS, the major stakeholders will be customers, competitors, government and suppliers. With the change in the definition, the stakeholder’s expectations and their overall influence have also changed. In the presence business environment, the power as well as influence of the stakeholders has increased. The customers have become more educated, quality oriented as well as more demanding. As more and more products and services are being launched, customer loyalty is decreasing. Today, customers look for more options such as discounts, freebies, customer services etc. Apart from this, the government scenario has also changed. Since UPS is a transport and logistics organization and is involved in local and international travelling, government intervention is regular and the company has to go through many check points. Others government regulations such as licensing, security, etc have become more stringent, which means that the organization needs to be more transparent in its operations. The competitors are other stakeholders who have influence in the company’s operations. Any move or change in the competitor’s strategy will have direct impact on the business of UPS. Suppliers also form an important aspect of the organization’s stakeholders business. They provide the necessary support to the company. In the last few years, there has been an increase in the number of suppliers. Thus, their influence on the company has also shifted. UPS Response to Stakeholder Expectations The company is a well known logistics and transportation firm. It has gained reputation and loyalty in the market due to its operational success and service delivery. However, UPS has observed few changes in the recent past. These changes are external as well as internal. The external changes which the organization experience was in terms of stakeholder’s perceptions and expectation from the organization. The organization has understood these changes and has made some appropriate strategies to resolve these issues. To meet the changing customer’s expectations, the organization made some attractive offers and discounts of bulk orders. The organization has also developed membership’s forums, where members are given special discounts and other benefits during placing an order of expecting service. To positively respond to these changes in the government, the organization have made its operations more transparent and responsive. The organization maintains the rules and regulation of the government and make sure that no law is broken during the company’s business operations. With the increase in operations and logistics business, the organization is facing direct as well as indirect competition. To ward off the competitors, the organization makes sure that the service provided by them is unique and inimitable. The infrastructure of the company is also considered as one of the best in this industry, and this provides UPS with a sustainable competitive advantage. The company keeps a track on the latest changes made by the competitors and this helps in changing strategy to ward off competition (Porter and Kramer, 2006). For maintaining a relevant and dependable supplier base, the organization has a strict process for supplier selection. The selected suppliers are one of the best in their services and provide superior service delivery to the company. To keep the suppliers motivated, the organization involves them in many activities such as supplier meeting, training and development programmes as well as incentives and bonus, which brings a healthy competition and superior performance by the suppliers. The society as a whole is also an important stakeholder for the organization. The company is involved in many sustainable practices and CSR activities. Key Performance Indicators (KPIs) Performance measurement is a vital part of an organization’s core function. With the help of performance measurement, a company is able to recognize its strengths and weaknesses and the direction of growth as well as the possible reasons behind it (Adams, 2006). Various methods are used to measure the performance of an organization. Key performance indicators (KPI) are a type of performance measurement methods. They help in measuring and defining the goals of an organization. To measure the growth and performance of UPS, the company has organized a set a performance indicators. These indicators have a set of standards which are used to calculate the performance of an organization, within that particular area or function, for a definite period of time. The various performance indicators of the company are described as follows; Penalties- this KPI is defined as a percent of the total number of environmental inspection done in the company. These include environment related fines paid as a percent of the total inspections made by the agency. Water Consumption- Normalized water consumption includes all facility and factory related water and use of water to clean and wash vehicles. This is expressed in cubic meters. Energy Consumption- Normalized energy consumption includes all stationary as well as mobile sources of energy. These can be gasoline, Jet A, diesel and compressed natural gas. Aircraft Emissions- this includes total emissions of hydrocarbons, carbon monoxide and nitrogen in kilograms which is weighted by annual aircraft cycles. Spills- reportable spills are those spills that meet the criteria of being federal or state reportable. Charity- this indicator includes the total charitable contributions, in kind services, employee and retiree donations as well as The UPS foundation grants, given to United States. Employee retention- it is an important indicator. This implies the total retention rate of full time employees or the percent of total employees staying with the organization annually. Benefits of the Corporate Sustainability Report The importance of corporate sustainability and its competitive advantage is ever increasing (Galea, 2004). Organizations are willing to modify their corporate culture and management mindset with the perception that doing good for the society and environment will make good business sense. Climate change, the global economic crisis, geopolitical instability, national security, and socially unfair trade and labour practices are all prominent issues that continue to fuel the global drive toward sustainability (Adams and Whelan, 2006). Stakeholders, including investors, customers, financial institutions, and employees, NGOs, communities, media and the regulators all have growing expectations for companies to address and examine the broader impacts their businesses have on the environment and community. The corporate sustainability report of UPS specifies the challenges and achievement of the company as well as the social and environmental contributions achieved by the company. The major benefits of the Sustainability report are as follows; Branding and increasing customer base- an inspirational and successful sustainability report will ensure that the current customers remain brand loyal and develop positive communication about the brand. Apart from that, the present report will also help the company to increase its client base, by attracting those customers and prospective clients who share the similar vision and social and environmental concern as the company (Hakala and Zsuzsanna, 2012). Talent retention and employee satisfaction- a visible, inspirational and well developed corporate sustainability report will ensure that the top talent of the company is retained and employee satisfaction is increased. Employees expect more than just a safe workplace, job securities and salaries. Today’s workers expect to be a part of the company which has a positive impact on the society and environment. Thus, with a strong sustainable report, the organization will be able to increase employee motivation and overall employee performance. Stakeholders Benefits From the UPS Initiatives As an organization, UPS has been influenced by a lot of people and other business. These individuals and groups are known as stakeholders of the business. The various stakeholders whom the organization can have are customers, clients, competitors, society government and suppliers. In this case, apart from the competitors, almost all the stakeholders have been benefitted by the UPA Initiatives (Banerjee, 2007). By making the company operations more transparent and paying out taxes and other obligations on time, the organization has been able to help the government is smooth transaction and working. Logistics is the core business of the company and UPS has gained an unmatched expertise in this area. With the help of the sustainability report, the company is now offering expertise to the service providers as well as suppliers in terms of knowledge, wo9rking operations and other function which will help in a better working efficiency. The success and popularity of the organization in its business reveals the extraordinary service which the company provides. UPS has a large client base and the loyal customers and client who always prefer company’s service. Apart from this, the organization also has facilities for its long-time customers and big accounts, which are constantly benefitted by the services of the company. Reference Adams, M. L. & Whelan B. M. (2006). Conceptualizing Future change in corporate sustainability reporting, accounting, Auditing & Accountability Journal, 22, 118 – 143 Adams. D. (2006). The future of sustainability: rethinking environment and development in the twenty-first century. Cambridge: IUCN Banerjee, S. B. (2007). Corporate social responsibility: The good, the bad and the ugly. Glouscester: Edward Elgar Publishing. Galea, C. (2004). Teaching business sustainability: From theory to practice. Sheffield: Greenleaf Publishing. Hakala, S. & Zsuzsanna. V. (2012). Consumer-based brand equity and top-of-mind awareness: a cross-country analysis. Journal of Product & Brand Management. 21, 439 – 451 Porter, M. E. & Kramer, M. R. (2006). The link between competitive advantage and corporate social responsibility. 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