Economics: Supply and Demand and Stakeholder Theory Essay

Submitted By afshanmughal
Words: 2539
Pages: 11

Part One
Bellway was created in 1946 and is considered among the largest housebuilders in the UK. (Bellway Homes Limited,2012). The company works through local teams. The main activities involve from land acquisition, architecture to helping customers. Every business has got ‘stakeholders’ they imply those persons, groups or institutions that have an interest in a business. Some of Bellway’s stakeholders are: * Bellway * Shareholders * Employees * Customers * Suppliers * Bank ex Land Bank * Competitors * Government * Communities

In order to succeed, a company should be considerate to all stakeholders. The following article helps to understand the stakeholder theory: * Freeman proposed stakeholder theory; he argued that the business should take interests of the other stakeholders too for counteracting the dynamic environment. There are diverse stakeholder groups. Managers have the responsibility to cater for their interests. The theory is rather a set of theories. Value creating, decision-making processes and behavioural relationships should be its focus. The deficiency argued upon is the vagueness of the term stakeholder and is based on more morally as to financial objectives. Conclusively, stakeholder theory has been in every field for its positive features but the ambiguity traits should be worked on (Alves et al.,2011).
As it has been noted above, stakeholders are diverse, so consequently their respective interests will be too. These can be presented as follows:

The company should manage all these stakeholders fairly by knowing their interests and powers. The stakeholder mapping can help to elaborate:
Stakeholder mapping: the power/interest matrix
Level of interest Low High AMinimal effort | BKeep informed | CKeep satisfied | DKey players | Low



Source: Mendelow,(1991, adapted by Johnson et al.,2007) By managing its stakeholders in this way mentioned in the matrix, the company will know the exact circumstance and work accordingly. Alternatively, there can be areas of potential conflict between the stakeholder groups, two sets are given as examples in the tables below:

The following article tells how a construction business may be struck by Government’s decision as the latter being a stakeholder, here purchase of second homes may be minimised. * Many people with second homes will face an increase council tax bills. After the rise in purchase of second homes over the last ten years their worth is nearly £100bn. Many councils plan to apply a rate of 150 % council tax in empty houses (Hammond et al., 2012).

Eventually it can be argued that stakeholders have an important role, by going for or against a company and managers should know how to work with them.

Part Two
The term ‘Corporate Social Responsibility’ goes beyond the factor of money making to a wider commitment to build a better society (Musafer,2012). If businesses do not take CSR seriously they risk to be laggards and result in financial constraints.
According to the article by Barthorpe (2010), * The UK Construction and Property Industry have a disruptive impact on the society due to the nature of its tasks. So, implementing CSR can mitigate the negative image. Globalisation makes it more demanding. One of the opponents of CSR is Milton Friedman. CSR is not bound by statutory requirement. The Carbon Neutral Company is working for the mitigation of CO2. It is argued that the UK Construction and Property Industry serve the community on an ad hoc basis. The Considerate Construction Scheme provides a code of practice. Though the UK Construction Companies have not formalised CSR, commendable CSR has been illustrated by UK developers and contractors for decades. As