Economic logic of responsibility to stakeholders

An economic, as well as an ethical, case can be made for organizations to be responsible to stakeholders. The failure to attend to such responsibilities risks alienating customers and suppliers, violates regulations and laws, and, ultimately, threatens the stability of the organization. Understanding who and what an organization’s stakeholders are is perhaps one of the most difficult components of fulfilling those responsibilities. Stakeholders who immediately come to mind are the company’s owners, employees, and customers. Not far behind are suppliers and communities in which an organization operates.

Beyond this simple identification, an organization should thoroughly assess and determine exactly who are the legitimate stakeholders of its operations. As you learned in Topic 2.2, any party that benefits from or is harmed by the actions of an organization is a stakeholder in that organization.

At a basic level, the organization should understand what customers, as one of many stakeholder groups, value in regard to their relationship to the organization. This goes beyond giving customers something they perceive to be valuable for a fair price. The organization should strive to ensure that the perception is reality. For instance, a fast food company that offers the value proposition of the “healthiest burger” need not stop at making a burger that has one gram of fat less than its competitor — it should strive in many