Analyzing the Stakeholders and Ethics Case Study

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Stakeholders and Ethics

Stakeholders in an Organization

Stakeholders are those individuals who have a stake, a claim or an interest in a company or organization. Such individuals get different types of rewards, such as organizational status, returns or power, because they contribute some sort of expertise, skill and/or knowledge to the organization. Dell Inc. is one of the biggest global tech corporations that build and sell PCs and computer related hardware. In 1988, the organization changed its name to Dell Computer Corporation and tried selling its PCs through stores, a few years later, in 1990. The latter move was, however, unsuccessful and they reverted to selling their products directly to their clients. One of the key things that have ensured success for the company over the years, is their flexibility. The company strives to incorporate stakeholder and consumer feedback into its product design and innovation processes. This guarantees it, customer loyalty. Through incorporating customer/stakeholder feedback into products, the company saves a lot of money and time, since it cuts or minimizes some steps in the R&D process. Another factor that has ensured success for the company is the fact that it motivates its staffs through different types of incentives, such as free training, which helps strengthen interpersonal, conceptual and technical capacities. Dell acknowledges the importance of stakeholders, and has an established stakeholder consultative group. Dell defines stakeholders as persons who are experts on various material issues that affect the company, and who can engage in honest and effective discussions. The feedback, advice and guidance offered by the stakeholders, allow the company's corporate responsibility team to advice its leadership on its duties as a global citizen (Kanal, 2010).

The Top Management Structure

Companies are embedded in a hierarchical social structure that is driven by the needs or interests of its stakeholders. Companies exist because they can create value and deliver desired outcomes for stakeholders.

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Stakeholders are classified into two main groups: internal and external. Successful organizations are those that satisfy the demands of both stakeholder groups. Stakeholders can number from a few dozens to thousands of individuals, thus they cannot all run the corporation. Instead, they delegate this authority to company executives. Stakeholders also have to observe ethics when dealing with each other, so as to ensure effective consultations and delivery of desired outcomes. Individual, professional and societal ethics, together, form organizational ethics. An organization's leadership or its management can make sure that the organization is ethical by establishing an ethical culture -- complete with a structure and control system -- and backing the interests of all stakeholder groups. The troubles that faced Dell and its businesses show the negative effects that result when a company's top executives do not uphold high ethical standards. There is need for leaders to manage companies in an ethical manner, since customers rely on the honesty, integrity and ethics of organizations to make good products. In the case of Dell, clients expected the company's managers to produce good computers. Therefore, if a company is known for its lack of ethics, its staffs can also be assumed to be unethical, since one would rationally believe that their conduct and behaviours were regulated by its code of ethics (Kanal, 2010). Even in cases where a company's unethical conduct was the result of a handful of employees, it will still be assumed that all employees were unethical. Therefore, all employees have a responsibility to ensure that an organization creates value, and delivers desired outcomes, in an ethical manner, since any negative or unethical conduct would affect all individuals, and the firm at large.

Organizations can face different types of challenges when trying to get the approval of their stakeholders. These challenges include: balancing between long-term and short-term goals,….....

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