Multi-Stakeholders Issues Assessment for Global Organizations Essay

Multi-Stakeholders Issues Assessment for Global Organizations - Essay Example The two detrimental events have been key contributors to this change. In the beginning of 2000s, eruption of corporate scandals such as Enron, WorldCom, and Tyco advocated the idea that multi-national corporations and corporate executives care little for ethics, in their pursuit of profit and wealth generation. In 2008, the global financial crisis erupted and rippled across the world, due to a wide convergence of factors in the real-estate market and secondary financial markets, causing economic collapse of many countries, state and private organizations. This crisis, initially affecting the banking industry, not only scaled to a broader economic and geographic spectrum, but also widened the chasm between Wall Street and Main Street triggering wide-spread anti-capitalism and anti-MNCs protests. In spite of their substantial differences, both of these intra and inter-company crises have at least few characteristics in common. Both crises exemplify that managerial behavior and decision -making has high risk and potential to impact a broad range of people all over the world (Clement, 2005). These crises have been major blows to the public trust in business as an institution. In addition, these financial and economical catastrophes also accentuate that the pursuit of corporate goals can be, without difficulty, unsettled by the actions and behavior of unexpected groups and individuals (Parmar, et al., 2010). These issues, driven by change, interconnectedness and globalization, indicate a need for managers and academic scholars to re-evaluate the conventional ways of conceptualizing the responsibilities of the firm and role of a manager within the company. This essentially gives rise to the need of evaluating and effectively managing needs of all stakeholders for the organization. The concept of corporate objectives focused towards a broader and diverse set of stakeholders has been studied by a number of scholars and practitioners for the past few decades. Among many ideologies, â€Å"stakeholder theory† or â€Å"stakeholder thinking† has developed as a fresh narrative to analyze and manage three interconnected business challenges — the challenge of understanding how value is created and operated, the challenge of linking ethics with capitalism and the challenge of supporting managers with tools to address the first two challenges. This essay highlights and addresses the â€Å"stakeholder approach† to tackle challenges related to business ethics, corporate social responsibility and value creation. Upon the understanding of what stakeholder approach reinstates, the essay analyzes the dilemmas, issues and recommendations in its practical applications for managers. The Stakeholder Approach The stakeholder approach in the context of strategic management was first proposed by R. Edward Freeman in 1984 (Freeman, 1984). Contrary to the customary understanding of corporate strategy, which fundamentally associates the term â⠂¬Å"stakeholder† with the owners, investors or shareholders of the organization, Freeman defined a stakeholder more broadly as â€Å"Any group or individual who can affect or is affected by the achievement of the firm’s objectives†. This was the first time that an academic study related to