Practical Motivation
Stakeholder theory lingers around on the idea that business organisations exist to serve those with a stake or interest in the present as well as the future of a company. Stakeholders provide a business realistic and monetary support. They help in expanding the pool of individuals who genuinely care about the well-being of the business organisation, making the owners and the management concentrate only their entrepreneurial and managerial work. Stakeholders can vary from employees to loyal customers, investors, suppliers, local communities, government and the public at larger. At its prime, the relationship between a firm and its stakeholders is symbiotic and strong. A flourishing association between a company and its stakeholders is built on functioning together towards a common goal. A business organisation with an interested community of stakeholders would reap financial benefits from these relationships. This statement forms the main crux of this research proposal, which has been subsequently researched upon through the research.
The stakeholder theory is an essential theory, which has emanated from the branch of ethics, for the successful running of any organisation. This theory identifies a group of people, who have an interest, investment, stake or who are affected by the company’s functioning and policies and look for satiating their needs and welfare (Harrison, Freeman and Abreu 2015). Practically, this theory is of great significance for the betterment of the organisation, its policies and for the stakeholders as well. Proper rewards and recognition to the employees, fair and timely payment to the suppliers, respecting the ecological norms of the environment, taking care of the environmental rules and regulations, timely payment of taxes and respecting all the rules and norms of the government, building schools, hospitals and NGOs for local communities all these important functions help in ensuring that the needs of each of these stakeholders, are being met (Harrison and Wicks 2013). This is some of the most important parts of the practical aspects of this theory. From the perspective of the accountants, managers, employees, suppliers, general public, government and other stakeholders, implementation of the stakeholder approach is necessary. Looking well beyond the needs of the group of both internal as well as the external stakeholders of any business organisation, and making them feel important, secure and relevant to the day to day affairs of any company is very important. Only because of these steps, the stakeholders can consider themselves to be an inherent part of the concerned business organisation.
Theoretical Motivation
As per the research conducted by Fernando and Lawrence in 2014, an integrated theoretical framework for the stakeholder’s theory has been made with regards to the three main theories of legitimacy, stakeholders and institutional theory. Their integration and complementary nature had been discussed upon in the research and it would help in establishing the corporate social performance practices. In the research theory advocated by Clarkson in 1995, looking after the needs of the primary stakeholders was very important apart from the shareholders of any company, without favouring one group the expense of the other. In the case of Donaldson and Preston’s research on the stakeholder theory in 1995, made some important revelations, about the descriptive accuracy, normative validity and instrumental power of the theory of stakeholders. The importance of this theory and its relevance forms the normative base of the theory of stakeholders. Although, all these researches were useful, relevant and had helped in grasping some significant intricacies of the stakeholders theory (Mansell 2015). The present research serves to throw some light on the left out portions of the past researches on this topic, which is the importance of the impact of looking after the needs of the stakeholders such as the general public, communities, regulators, activists, and the media on the performance of the company, particularly the profits earned from the business.
In the past some important researches had been conducted pertaining to the topic of stakeholder’s theory. Each of these researches made some significant revelations and contributions with regards to the importance of the stakeholder’s theory. In accordance with the 2014 research conducted by, Fernando and Lawrence on the theoretical framework for CSR practices, aimed at integrating the three theories of legitimacy, stakeholders and institutional theories, some important conclusions were made. The most significant one was that a exists a close knitted relationship between the legitimacy, institutional and the stakeholder’s theory and can be included in the corporate social responsibility practices of any organisation for explaining the motives of these CSR practices, in the context of these theories. Mitchell, Agle and Wood had in their 1997 paper, had used researched on the stakeholder theory. The failure of stakeholder theory not having attained a theoretical status had been revealed. The importance of the three attributes of legitimacy, urgency and power for a stakeholder and its importance towards the management of the firm have been the focal point of this research. The importance and salience of these three attributes in respect of a stakeholder, towards the organisation, was the main idea behind this research. In the research conducted by Tang and Tang in the year 2012, some important observations were made about the stakeholder’s power theory. It has also discussed that till now the stakeholder’s power theory has been at the forefront, but the firm’s countering powers have not been systematically examined or scrutinised. Through this research, both Tang and Tang have tried to propose that the stakeholder and firm power difference influences the firm’s social and environmental performance and the corporate social responsibilities towards the stakeholders. After conducting a successful survey where sampling of 144 small and medium size business organisations was done, some significant revelations were made. One of most important ones being that the power difference between the firms and the different stakeholders including the media, government and the competitors, greatly influenced the environmental performance of these small and medium Chinese enterprises. Furthermore it was also seen that the media’s and the government’s CSR course heavily influences the relationship between stakeholder-firm power difference and firms’ environmental performance. In their research on the stakeholder theory, an ethical approach towards effective management, Harrison, Freeman and Abreu, (2015), had portrayed some significant revelations and conclusions, which had steered the research on the topic of stakeholder’s theory into a new direction. It was established and found out that the stakeholder theory is for the most part a constructive perception for looking into some of the most pressing issues in business from an international viewpoint. It offers an opportunity to revisit and interpret a wide range of concepts, models, ideas and phenomena athwart from many diverse disciplines.
Literature Review
Telstra is a leading and Australia’s largest telecommunications company, which deals with a variety of mobile, internet access, voice, television and other markets. It is headquartered in Melbourne, Australia. The company has been exemplary in its responsibilities of a reputable company, which regularly discharged its duties towards its stakeholders. The employee engagement is 79% in 2017, the carbon emission were drastically reduced by 33%, recycling of mobile phones and other accessories for looking after the environmental impact of the company(Telstra Exchange, 2018). It has also done a lot for the communities as well. Producing programmes such as digital literacy, cyber safety seminars, community volunteering, various funds were invested through the Telstra foundation. Telstra has been looking after the needs of its external as well as the internal shareholders. The company has been proactive in the implementation of the stakeholder’s theory.
Through this, research, after keeping in consideration all the results, knowledge and the information’s some new ideas came into the attention, which were overlooked before or were not given their due importance. Some of these areas, were cross country research on the topic of stakeholder theory, how the application of the stakeholder theory is being done across various business organisations, the meaning and the significance of value for different stakeholders and the various ways, this value can be measured in respect of the different stakeholders of any business organisation etc. Through the usage of this research proposal, a significant research is to be conducted on what impact stakeholder theory would have on the profitability and the firm’s performance. The firm’s performances because of the execution of the functions of the stakeholder’s theory are very important. It has been overlooked for a long period of time. In this research proposal, two different variables have been taken, one being the independent variable, the other being the dependent variable. In the case of the dependent variable, the firm’s performance was considered and in the case of the independent variable the functions of the stakeholder theory was considered. The impact of the execution of one variable would be seen on the other variable which is the financial performance of the business. The purpose of this research was to find out the link between these two aspects, if there is a viable link between the two aspects of firm performance and execution of the different functions of stakeholder’s theory, which was aimed at looking after the different demands of the different stakeholders, both the internal as well as the external ones.
The case of Telstra
Hypothesis is a significant part of any research proposal. In the present research proposal, the importance of hypothesis cannot be downplayed. It aims to define the relationship between two different variables. Here in this case, the two different variables are the functions of stakeholder theory and the performances of the business organisation. In the present research proposal, the null hypothesis has been used. Here two aspects have been presented. First one, which considers that performance and execution of the functions related to the stakeholder theory has a significant impact on the overall performance of any business organisation. The other one which assumes that there exists no such link between the two, where there is no impact of the performance of stakeholder related duties and the overall company performance. With this hypothesis, the research proposal would be conducted, which would help in establishing the truth of the presence of any kind of relationship between the stakeholder related functions and the overall firm performance.
References:
Boesso, G. and Kumar, K. 2016 Examining the association between stakeholder culture, stakeholder salience and stakeholder engagement activities: An empirical study, Management Decision, 54(4), pp. 815-831.
Bridoux, F. and Stoelhorst, J.W., 2014. Microfoundations for stakeholder theory: Managing stakeholders with heterogeneous motives. Strategic Management Journal, 35(1), pp.107-125.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to finance. Strategic management journal, 35(1), pp.1-23.
Clarkson, M. B. E. 1995 A stakeholder framework for analysing and evaluating corporate social performance, The Academy of Management Review, 20(1) pp. 92-117
Deng, X., Kang, J.K. and Low, B.S., 2013. Corporate social responsibility and stakeholder value maximization: Evidence from mergers. Journal of financial Economics, 110(1), pp.87-109.
Fernando, S. and Lawrence, S., 2014. A theoretical framework for CSR practices: integrating legitimacy theory, stakeholder theory and institutional theory. Journal of Theoretical Accounting Research, 10(1), pp.149-178.
Harrison, J.S. and Wicks, A.C., 2013. Stakeholder theory, value, and firm performance. Business ethics quarterly, 23(1), pp.97-124.
Harrison, J.S., Freeman, R.E. and Abreu, M.C.S.D., 2015. Stakeholder theory as an ethical approach to effective management: Applying the theory to multiple contexts. Revista brasileira de gestão de negócios, 17(55), pp.858-869.
Hörisch, J., Freeman, R.E. and Schaltegger, S., 2014. Applying stakeholder theory in sustainability management: Links, similarities, dissimilarities, and a conceptual framework. Organization & Environment, 27(4), pp.328-346.
Mansell, S., 2015. Book review: rejoinder to Veldman’s review of capitalism, corporations and the social contract: A critique of stakeholder theory (Vol. 22, No. 2, pp. 271-275). Sage UK: London, England: Sage Publications.
Mitchell, R. K., Agle, B. R., and Wood, D.J 1997 Toward a theory of stakeholder identification and salience: defining the principle of who and what really counts, The Academy of Management Review, Vol. 22, Iss. 4, pp. 853-886
Tang, Z. and Tang J 2012 Stakeholder-firm power difference, stakeholders’ CSR orientation, and SMEs’ environmental performance in China, Journal of Business Venturing 27 (4) pp. 436-
Telstra Exchange. 2018. Sustainability Report 2017 | What we do | Telstra Exchange. [online] Available at: https://exchange.telstra.com.au/sustainability-report-2017-what-we-do/ [Accessed 23 Aug. 2018].
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
