A stakeholder is any person, organization, social group, or society at large that has a stake in the business.Stakeholders and its types are same for Europe as well as for south Asia. Thus, stakeholders can be internal or external to the business. A stake is a vital interest in the business or its activities. It can include ownership and property interests, legal interests and obligations, and moral rights. A legal obligation may be the duty to pay wages or to honor contracts. A moral right may include the right of a consumer not to be intentionally harmed by business activities. Stakeholders can:
Affect a business
Be affected by a business
Be both affected by a business and affect a business
Type of Stakeholders
Customer: whose needs must be met with goods or services that deliver competitive value.
Employee: who develop and operate the business processes.
Suppliers, Distributors and Creditors: These groups must be treated appropriately if they are to be reliable and committed.
Communities: whose needs primarily by providing goods or services that the community values and jobs that the community needs. The Business, however, should also be a good citizen, honoring the laws, paying appropriate taxes, preserving the environment, and participating in the governance of the community.
Corporate Responsibility is a self-regulating business model that helps a company be socially accountable — to itself, its stakeholders, and the public. By practicing Corporate Responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society including economic, social, and environmental. To engage in CR means that, in the normal course of business, a company is operating in ways that enhance society and the environment, instead of contributing negatively to it.
Ways to practice CR:
Ethical labor practices
Corporate responsibility is defined as “the voluntary action business take over and above legal requirements to manage and enhance economic, environmental and societal impacts” (UK-department for business, innovation and skills 2014″. To achieve corporate responsibility objective the framework of corporate social responsibility (CSR) is establish in Europe.
Comparison of Corporate responsibility in Europe and south Asian countries?
In the Europe more attention has been focused on corporate responsibility. More attention goes now on integrating CSR (corporate social responsibilities) in to business objectives and, above all, on redefining the role of a company in society and its environment. To respond to the trend, not only corporations but local public bodies are also developing CSR policies in Europe. For example, there are already regions ?North-West of England or some regions in the Netherlands and Italy? that attempt to promote themselves as CSR-conscious regions in order to attract investments from companies for whom CSR may be a strategic element of business policy.
In Asian countries, there is still a lot of misunderstanding of the costs and benefits of CSR for individual companies but also at the regional and national levels. While nobody questions the likelihood of a company suffering in the long term if it inflicts constant and significant harm to the community, the upside of CSR is so hard to quantify that it let many companies dubitative. Admittedly, while things may become relatively straightforward for large companies following a consistent code of conduct, the situation gets far more complex for those companies operating as outsourcing operators and facing the relentless pressure from clients whose objectives are not to become ?good corporate citizens? but just to cut production costs. Delivering price-competitive manufacturing while sharing also the costs of CSR is hard to swallow for most Asian suppliers and smacks easily of large companies’ hypocrisy or PR postures in their minds.
Due to high cost and inflation it is very difficult for Asian countries to properly establish the mechanism of corporate responsibility. It will take years to establish CSR concept in poor countries of Asia.
Corporate Responsibility Trends
Companies and their boards of directors worldwide have been giving increasing attention to corporate responsibility and even formalizing, through policies and reports, CR-related activities, reporting, and communication.
Stock exchanges developed equity indexes to measure companies’ performance relative to CR areas, especially to economic, environmental, social, and other criteria and standards. Such indexes are multiplying and spreading the influence of CR activities and reporting. In 2001 in the United Kingdom, for example, the London Stock Exchange launched the FTSE 4 Good Index, “which measures the performance of companies that meet environmental and social standards.”
Obstacles to Corporate Responsibility (CR):
Companies play a crucial role in the ensuring the overall development of a nation. But when it comes to the issue of Corporate Responsibility (CR), only a handful of small businesses are seen as successful. What are the main factors that hinder CR in Companies and how can they be overcome? Corporate Responsibility (CR) activities are a vital element of any professional organization. This is the case especially for Companies. As a result a few of these small businesses are beginning to take their CR activities seriously. Research has established that there are a number of major obstacles hindering the application of good CR practices and policies into Companies and other companies as well.
Lack of awareness: It is a fact that many Companies have little knowledge of CR. Companies owners and managers often do not fully comprehend the demands from the stakeholders and therefore do not fully realize how much they value CR. In some cases, Companies may have a greater understanding of CR issues but lack understanding on how to begin implementing a CR program. Finally, there is significant ignorance about the benefits that can be gained from good CR practices. Your business should invest in programs of creating awareness about the importance of CR.
Lack of human resources: Many Companies claim that they lack the human resource that they can assign to CR practices. In addition, many management systems being used by Companies are very unproductive, inefficient and wasteful of human resources. In order to develop good CR policies and practices, your business should focus on recruiting/training staff that will be able to head and develop CR initiatives.
Competing codes of conduct and multiple requirements: A major concern for many business owners and managers is connected to competing codes of conduct from different customers. Such duplication is expensive and frustrating to suppliers. To avoid this, you business should help customers agree on common standards to be adhered to.
Costs: Companies constantly face the challenge of tighter budgets brought about by rising costs of material, energy and wages. Therefore, most are unable to spend much money on CR initiatives. However, CR activities can be carried out at any level. Even if your business has limited funds, you could create a separate CR budget so as to ensure unnecessary expenditures are avoided. Selection of appropriate, low cost initiatives will enable you to carry out CR activities with your limited budget.
Over-emphasis on inspections and cheating: Many Companies are guilty of not complying with codes of conduct. Many Companies owners and managers have the perception that they can not do business and make profits while adhering to codes of conduct and regulation. Your business, however, does not have to ‘cut corners’ to remain in business. You need to dialogue with key stakeholders and find a balance between making profits and full implementation of CR codes of conduct.
Comparison to overcome obstacle to corporate responsibility in Europe and south Asian countries:
The European Commission promotes CSR in the EU and encourages enterprises to adhere to international guidelines and principles. The EU’s policy is built on an agenda for action to support this approach. Therefore in Europe the CSR practices are at their right path on the other hand CSR practices in developed nations have developed meaningfully and the CSR discussion is quite progressive. Over the period of study the domains of CSR practices have prolonged and scholars have largely agreed on five domains (economical, legal, ethical, philanthropic, and environmental) of CSR practices. Reviews of different CSR-related global models reveal that there are certain CSR issues that are common across the major theoretical models, such as human rights, labour standards, and environmental issues. However the state of CSR practices of developing countries is not effectively described by existing global models. The macro environmental conditions, country-specific CSR policies and contextual determinants influence their CSR practices. This is principally because of developing countries’ ineffective use of regulatory framework, a lack of government initiatives, etc., which deter corporations from incorporating global better practice models. In developing countries most corporations view charitable engagement as their major CSR activity and are mostly engaged in profit maximization. Other domains are largely ignored.