Social Performance of Corporations - Essay Example

? Social performance, assignment part Social performance, assignment part AOL, Inc Introduction One of the medium-sized public Corporations is AOL, Inc. the company is a brand company that is committed to continuous innovation and investment in brands and experiences that aim at entertaining, informing and connecting the globe (AOL, Inc. 2013). The company has attained brand identity through delivering excellent content, innovative products and services. Some AOL brands include the boot, cambio, AOL answers, engadget, games.com, AOL help, and kitchen daily. The organization has performed excellent in its social duties and culture. The chief executive officer is Tim Armstrong (AOL, Inc. 2013). The company is committed to conducting operations in ways that conserve the environment through reduction of energy consumption in computer servers, implementing energy-efficient data centers, reduction in carbon footprint, green building, and recycling of plastic bottles, toner cartridges and aluminum cans (AOL, Inc. 2013). The company has strengthened communities through employee volunteers, donation of computer labs, empowering consumers like users of Huffing post, supporting the advertising partners like through AOL network and advocating for internet integrity and safety (Benn and Bolton, 2011). The company has a diversified workforce that caters for wide range of interests and needs (AOL, Inc. 2013). In addition, the compensation is fair and employment practices prohibit discrimination (AOL, Inc. 2013). However, the company must increase resources committed to social responsibility activities by at least 10 percent of the annual revenues and use at least 5 percent of the profits in promoting internet safety and integrity values. The primary stakeholders have a direct interest in AOL, Inc decision-making and operations and include shareholders, customers, government, creditors, employees, strategic advertising partners, and communities (Benn and Bolton, 2011). The secondary stakeholders have an indirect interest in AOL, Inc operations and include labor unions, the media, competitors, advocacy groups, and research centers. The primary stakeholders are either positively or negatively affected by the decisions of the management while the secondary stakeholders are not directly affected by the actions of the management (Benn and Bolton, 2011). The primary stakeholders have contractual relationships with the management and ensure their interests are preserved in the decision-making. The shareholders expect the management to make investment decisions that will increase their return of investment (Benn and Bolton, 2011). Accordingly, the shareholders provide capital and desire to receive regular dividends and make a capital gain in the future sale of the investment (Benn and Bolton, 2011). The employees are the providers of knowledge and skills and expect the management to pay fair salaries and provide additional work benefits including safe working conditions (Kottler, 2012). The employees expect job security, promotion opportunities and protection from discriminatory work practices. The customers are interested in receiving exciting products and services at fair prices (Polonsky, 2005). The customers create demand for the products and services thus their interests must be protected in order to ensure higher organizational profitability (Kottler, 2012). The creditors are providers of debt capital and are interested in receiving an interest on capital and repayment of the principal without failure. The government is interested in receiving tax revenues and ensuring the business operates within the legal framework (Boonstra, 2004). The strategic advertising partners require the company to adhere to contractual agreements and honor all business contracts without failure. The communities provide the charter for the business to exist and supply labor and natural resources (Benn and Bolton, 2011). The primary stakeholders have conflicting interests. The secondary stakeholders have no direct interest in the company, but expect the management to make decisions that aim at ensuring the survival of the company in the market (Boonstra, 2004). The media is concerned with treatment of minority employees while research centers are concerned about relevant market data provided by the company. Advocacy groups like environmentalists desire the company to conserve the natural resources while labor unions are interested in ensuring the company abides to all collective bargaining agreements (Kottler, 2012). The primary stakeholders such as employees and customers can negatively affect the social performance of the company (Benn and Bolton, 2011). For instance, employees through their labor unions can demand higher salaries that will hinder ability to meet social obligations. The knowledgeable customers can demand for lower prices and higher quality products thus affecting the profitability of the company (Boonstra, 2004). The shareholders can sell their stake in the company thus leading to decline in organizational value while strategic advertising partners may decide to withdrawal from contractual agreements and sue the company when it fails in honoring the business contracts (Benn and Bolton, 2011). Plan of encouraging stakeholders to form a coalition to ensure higher social performance and good corporate culture The starting point is establishing a vision for the change and communicating to different stakeholders on the importance of the powerful coalition in ensuring change in the organization (Kottler, 2012). The change expert must create urgency for the change through outlining harmful scenario than may occur in future if the organization does not engage in social activities or does not change the culture (Boonstra, 2004). The next step entails identifying compatible interests and making sure goals are similar and compatible. The change leader must identify the true leaders of each stakeholder group and gain the mutual trust and emotional commitment of the leaders. The next stage will entail team building in the change coalition, identifying and ensuring that weaknesses in the coalition are solved (Boonstra, 2004). The next stage will involve creating a vision for change, determining core values and outlining the strategy for implementing the vision. The next stage will aim at removing any obstacles through changing the organizational structures, clarifying different stakeholder interests and rewarding individuals who commit to the change (Boonstra, 2004). The next step will entail creating short-term wins that will motivate the change process and ensure individuals do not feel the social commitment as expensive to attain. For instance, the organization may aim at increasing the number of female employees by 10 percent in the first year and committing 2 percent of total revenues to charity work in the first financial year. The next stage will entail building on the change through continuous improvement and committing more resources to social responsibility activities (Boonstra, 2004). Accordingly, the management must ensure the shared values; beliefs and norms of the company are contained in all communications to stakeholders (Kottler, 2012). The final stage will involve anchoring the changes to the new corporate culture through sharing the success stories, recognizing the change champions and ensuring recruitment plans are aligned with the new culture (Boonstra, 2004). Anticipated challenges and ways to overcome challenges Some challenges expected while working as a coalition include differing goals and attitudes of the change leaders (Kottler, 2012). Conflicting stakeholder interests such as conflicts between the interest of shareholders and those of employees may derail the implementation of change in the organization (Boonstra, 2004). Another possible challenge is lack of trust between change leaders and poor communication among the powerful coalition members. Change resistance may also be occasioned due to fear of job losses and loss of status and power in the organization among the senior management (Kottler, 2012). The bureaucratic organizational structure and threat of specialization will also hinder the change. Inadequate resources may also hinder the social performance of the company (Boonstra, 2004). I will be capable of handling the challenges through creating urgency to attain the goals and demonstrating how the survival and profitability of the company may be affected if the changes are not implemented (Kottler, 2012). It will gain the commitment of top management and ensure open communication and feedback to all stakeholders in the organization. I will also utilize short-term wins and rewards to ensure stakeholders’ remain committed to attainment of the goals (Boonstra, 2004). I will also anchor the goals in the corporate culture and ensure all stakeholders have shared values, beliefs and perceptions about the goals. Conclusion AOL, Inc has performed well in social perspective and culture. However, the organization must increased the resources committed to social responsibility activities and align the corporate culture with the common objectives. A powerful coalition is essential in driving the attainment of the goals. I will outline the urgency for change, build a powerful coalition and strategy for the vision and ultimately have short-term wins that will drive the attainment of the goals. References: AOL, Inc. 2013. “Corpoarte social responsibility”, Retrieved on 31st July, 2013 from http://corp.aol.com/our-values/corporate-citizenship. Benn, Suzanne and Bolton, Dianne. (2011). Key concepts in corporate social responsibility. London: Sage. Boonstra, Jaap. (2004). Dynamics of organizational change and learning. Chichester: John Wiley & Sons. Kottler, Jeffrey. (2012). Making change last. New York: Routledge. Polonsky, M.J. (2005). Stakeholder thinking in marketing. Bradford: Emerald Group Publications. Read More