Successful companies have well established code of ethics. Members of an organization with high ethical standards are held to these standards, including the decision makers responsible for making strategic plans that affect the organization and its surrounding communities. Maximizing shareholder wealth should not be the only priority when developing strategic plans. However, an organization will need to generate revenues to be profitable and successful. Ethics and social responsibility should be included in the organization’s strategic planning process. Ignoring the environmental impact, cutting corners on safety practices, and practicing questionable business tactics just to increase profits could be detrimental to an organization when these types of practices becomes the norm. According to Michael (2011), “Managers are understanding good things happen to organizations that do the right thing and consequences come with cutting corners and doing the wrong thing” " (para. 2). Successful companies balance generating profits at the same time maintaining its ethical and social responsibilities. Strategic management decisions should be made after taking to account the impacts of its decisions on the organizations stakeholders, surrounding communities, and the environment.
Satisfying the organization’s stakeholders should not be the only driving force behind making a strategic decision. However, these groups can influence decisions and the way an organization prioritizes its efforts. Stakeholders in an organization consist of two groups; primary and secondary. Customers, employees, shareholders, and creditors are primary stakeholders who directly can influence a strategic management decision. Secondary stakeholders have an indirect stake in the organization but are also affected by the outcome of a decision. These include non-governmental organizations, local communities, competitors, and governments (Wheelen, 2010). Economic gain is usually the priority for primary stakeholders whereas environmental concerns, social benefits, and regulatory compliance are priorities for secondary stakeholders. Satisfying the needs and wants of both groups could be challenging when making strategic management decisions. However, by basing decisions on the priority of these needs and wants, organizations could set a clearer path for making important decisions when concerning how these decisions affect the organization’s stakeholders.
Relocating manufacturing plants, downsizing the workforces, and opening new sites are strategic management decisions that could influence communities surrounding an organization. Managers making decision like these should take the ethically responsible approach to inform these communities of the impending decisions. Employees, local business, and people who depend on an organization could be influenced by these actions. However, organizations that make involved with its community one of its priorities is usually successful by building a community bond. Starbucks continue to make community involvement a priority; in 2011 the corporation generated more than 442,000 hours of community service involving employees, civic leaders, and community volunteers. Starbucks revenues continue to grow and the “corporation have a strong connection to the communities they serve, and believe they have a responsibility to do even more with the assets of the company” (Starbucks, 2012, para. 1). Strategic management decisions should not just be on improving the bottom line but to build bonds and take into considerations how strategic decisions could affect the lively hood of the community.
When profits become the driving force for influencing management decisions, corporations usually make the nightly news in a negative light. According to (Feely, 2012) “BP executives pressured supervisors of the Deep-water Horizon rig to speed up drilling operations and hold down expenses as