Contemporary Issues in Management - Literature review Example

Contemporary Issues in Management Table of Contents Table of Contents 2 Introduction 3 Freeman’s Stakeholders Theory 4 Mitchell & et. al. StakeholderTheory 6 Corporate Social Responsibility in Lenovo 8 Advantages and Disadvantages of These Theories to Lenovo 10 Freeman’s Stakeholder Theory 10 Mitchell & et. al. Stakeholder Theory 11 Corporate Social Responsibility 12 Conclusion 13 References 15 Introduction This essay intends to explain about the role of stakeholders with Corporate Social Responsibility (CSR) in Lenovo. This essay also deals with the Freeman’s stakeholder theory in Lenovo, which addresses the moral as well as values in dealing with the organisation and Mitchell & et. al. stakeholder theory. Mitchell & et. al. stakeholder theory has the three criteria such as power of stakeholder to influence the organisation, the legitimacy of the relationship of stakeholder within the organisation and the urgency of the claim of stakeholder on the organisation. This essay also discusses about the advantages and disadvantages of these theories. Lenovo is one of the prominent computer manufacturing companies in the world. CSR in Lenovo is to look out the long lasting economic, social and environmental health of the company as well as the societies in which it operates. Lenovo focuses on the safety of the products to meet the requirement of the customers and healthy work environment for the employees so that employees can do their work without any tension to achieve the goals of the organisation (Lenovo, 2012). Stakeholders are the valuable participants for the development of the organisation and there are two types of stakeholders in an organisation such as internal stakeholders and external stakeholders. Internal stakeholders are employees, managers and owners of the organisation. External stakeholders are customers, suppliers, society, government, and shareholders of the organisation. The Freeman’s stakeholder theory developed by R. Edward Freeman first appeared in his book ‘Strategic Management’ published in the year 1984. This theory explains about the organisational management as well as the business ethics or morals of an organisation. Stakeholder in an organisation is a group of members who are involved in the attainment of the goals of an organisation. On the other hand, Mitchell & et. al. theory is also an important theory because it describes about the control power of the stakeholders to run a business or a firm (Mitchell & et. al., 1997). Freeman’s Stakeholders Theory Freeman’s stakeholder theory is a concept of management of organisations and the morals of the business. The success of an organisation depends on the healthy relationship of an organisation with the managers, customers, suppliers, employees and shareholders as well as stakeholders to attain the objectives of an organisation. Stakeholders can be divided into two parts, first as internal stakeholders and second as external stakeholders. All stakeholders play an important role in the future success as well as development of an organisation. In an organisation the responsibility of managers is to support these stakeholders and maintain a good relationship with them. Each and every stakeholder of Lenovo has the significant role with respect to CSR. The commitments of Lenovo’s stakeholders to CSR achieving the organisational goals while performing the business in eco-friendly manner. Another commitment of stakeholders of Lenovo to the CSR is delivering safe products to meet the needs of the customers. In addition, Lenovo is also committed towards providing safe and healthy work environment for its employees. Lenovo delivers the proper guidance to its employees regarding issues such as business related issues, healthy as well as safety issues and also the legal and regulatory requirements of the organisation (Lenovo, 2012). The stakeholders of Lenovo focus on the sustainable activities through the operational activities. Lenovo is a dynamic associate of the Electronic Industry Citizenship Coalition (EICC) and has incorporated the framework of the EICC both in its internal operations and the operations of global suppliers. Lenovo promises up to 1% of pre-tax income to the global service investment program every year or annually. The diversity policy and corporate policy of Lenovo are based on four core values such as customer service, innovative and entrepreneurial spirit, teamwork across cultures and trustworthiness and integrity. The Freemen’s stakeholder theory incorporates two types of views or strategies such as resource-based view and market-based view. These views define the specific stakeholders of an organisation. These views are strongly related to the marketing strategy of Lenovo (Freeman & Phillips, 2002). Lenovo is the computer manufacturer company; therefore this company should focus on the market to maintain the brand value as well as the quality of products. The company should focus on the internal and external views of the market to know the market trends and competitors in the market. Freeman’s theory provides the value and morals to manage an organisation effectively. It is related to the corporate branding strategy of Lenovo. To become an international company, Lenovo spread its businesses internationally and also created brand value of local PC as the most selling brands. Brand value depends on the several factors such as quality of brand, price, and expectation of customers as well as perception of customer and powers of competitors. The various competitors of Lenovo are IBM, Dell and HP among others. The idea of value proposition plays an important role in business strategy. In the modern business setting, the value proposition is required in business to achieve the competitive advantage of the organisation. The value proposition is related to the core strategy of Lenovo, which addresses the customer’s value throughout the managerial conception. The value of the customer means to give the preference of the needs of customers, which is an essential aspect to the success of the business. For the successful market Lenovo has to deliver the good quality products to the customers and increased its suppliers in the world in comparison to its competitors (Lin & et. al. n.d.). Mitchell & et. al. Stakeholder Theory Mitchell & et. al. stakeholder theory deals with the power of the stakeholders to encourage an organisation, the sincere relationship of stakeholder with an organisation and the claims of the stakeholder on an organisation. This theory is essential to maintain the healthy relationship with the stakeholders and to implement the power of stakeholders to influence an organisation. Mitchell & et. al. obtains a typology of stakeholders based on the quality of power, legitimacy and urgency. Eight types of stakeholders are obtained along with their suggestions for the organisation through the investigation of combinations of these three attributes in a binary way. Stakeholders are the participant of an organisation who takes major part by giving their suggestions for the development of the organisation. This theory relates to the corporate environmental strategy in Lenovo with respect to CSR. In recent trends, environmental issues have become more important for the social, political as well as economic awareness for the international development of an organisation. The structure of the stakeholders deliver more practical source for socially responsible decision-making. This strategy is helpful for Lenovo to spread the business internationally. The power of the stakeholders means the control power of the stakeholders such as investors, managers, suppliers, employees and customers for the attractiveness of the industry and their responsibility to the society (Argandona, 2011). CSR in Lenovo involves responsibilities or commitments to the employees and to the customers or to the communities. Legitimacy implies the beliefs and views of the stakeholders towards an organisation. Power and legitimacy can act together and the authority has to be given to those people who have both the attributes. The idea of urgency depends on the two elements, first the significance of stakeholders in relation to their demands and second is the sensitivity of the stakeholders that how long time managers will take to arrangement with their demands. Stakeholder theory is not is successful theory not only in the business ethics, but it is also used in CSR approaches. It is related to the corporate strategy applied by Lenovo (Gago & Antolin, 2004). Strategy is a type of task essential for the future plan of an organisation. Strategy is referred to as a course or a plan of an organisation, which benefit in altering environment through its formations of resources and capabilities with the purpose of fulfilling the expectations of stakeholders. Stakeholders are engaged in several steps of the tasks to attain the goals of the company. The several steps in which stakeholders can be engaged are planning and understanding the plan, internal preparation and arrangement of the plan, building the trust of other members and consulting with the other members regarding the plan and implementation of the plan for the outcome (Jeffery, 2009). These tasks of stakeholders relates to the business level strategy of Lenovo. Business level strategy is a strategy, which explains how businesses should compete in their specific markets. Business level strategy is also called as a competitive strategy. The decisions of this strategy involve value services, pricing strategy, innovation and differentiation of products, which is essential for the successful business. This strategy provides a proper guideline to the stakeholders of Lenovo to run the business in a proper manner, both nationally and internationally (Johnson & et. al., 2008). Corporate Social Responsibility in Lenovo Corporate social responsibility (CSR) and competitive advantage together are considered as an important issue in the modern business world. Following the current trend of globalisation, corporations are seen to be extremely conscious towards demonstrating their role in protecting the welfare of the community and preserving the environment. It has become an indispensable element for almost all organisations operating in the global arena (Filho & et. al., 2010). Likewise, Lenovo is also seen to engage in setting goals and strategy pertaining to CSR. Lenovo is dedicated to manufacturing the exceptional personal computers and help people by changing their way in the world through the use of technology. Lenovo is committed to provide innovative technologies and also ensures that the products, employees as well as suppliers of Lenovo are following the commitments that they have made towards the society. Lenovo holds the values of customer service, advanced technology and business spirit as well as consistency. The aim of Lenovo is to integrate core values into the business, policies and procedures in areas of quality and safety of products, welfare of employees, handling a global supply chain, moral corporate behaviour and affairs of environment. The employees and contractors in Lenovo work to promote the core values at level of the business. Product quality and safety are essential elements for the company to meet the needs of the customers by delivering better quality of products and best services. Lenovo also focused on the welfare of the employee. Lenovo provides healthy and safe workplace environment for the employees so that employees can work in a fresh mind without any tension. Lenovo deals with competitive compensation packages and accepts by minimum wage requirements in every country where they function. Lenovo maintain a high standard of integrity and responsibility (Lenovo, 2012). Lenovo provides a proper direction to the employees regarding the ethical mattes of the company such as ‘inappropriate conduct’, ‘trading in securities’ and ‘complying with governmental regulations’. Employees are required to report any immoral business conduct, destruction of laws, risk to health and any other destruction of the policies of corporations. The sustainability strategy of Lenovo is managed as well as evaluated by cross-functional and global committee of leaders and professionals and the experts on subject matters among others. Lenovo is dedicated to the well-being of its employees and expects that the decisions made by the management of the company reflect the core values and business expectation of the company. The operations of Lenovo Ombudsman office is based on four principles made by the International Association of Ombudsman (IAO) code of ethics such as ‘independence’, ‘confidentiality’, ‘impartiality’ and ‘informality’ among others. The role of the formal management structure is independent such as legal and human resources. It offers an informal and independent channel for the employees, so that employees can discuss freely without any worry. The conservations of Ombudsman office are confidential, but the only concession to confidentiality is the danger to Lenovo or the employees of this company. Ombudsman is not a characteristic of management or an employee rather than it is open-minded and impartial. Ombudsman is not a member of the formal management that’s why it does not contribute in any formal administrative procedures. Ombudsman always needs to be independent and should not involve anti-decision making process (Lenovo, 2009). Lenovo focus on the core values and business ethics for its development and growth. The sustainable growth of Lenovo depends on the performance, efficiency, innovative design, price, quality, reliability, brand name and availability of the product. The people of Lenovo are the extreme assets for the company that’s why the commitment of Lenovo to the people is to provide the safety working place, which is important for the efficiency and value of the company. Lenovo also provides the equipment, which is safe to use and focus on the preventing injuries. Another commitment of Lenovo is the accountability and leadership quality in the affairs of environment. Managers and employees of Lenovo also take responsibilities to protect natural resources, grow, produce and market products, which are safe for the users as well as environment (Lenovo, 2010; Lin & et. al., n.d.). Advantages and Disadvantages of These Theories to Lenovo Freeman’s Stakeholder Theory The major advantage of Freeman’s Stakeholder Theory to Lenovo is that it helps to manage the organisation as well as espoused business ethics. Managers, employees, customers, suppliers, financiers, communities and government are the vital participant of this theory. This theory helps in increasing the value and growth of the company, which is another advantage to Lenovo. It also helps in building the healthy relationship between the stakeholders, so that they can work together to attain the goal. Different types of values exist within an organisation. The theory further is anticipated to promote cooperation amid the stakeholders of the company which would eventually lead to the generation of cooperative value for shareholders of the company (Verhezen & Morse, 2010). Along with the advantages, this theory also has some disadvantages to Lenovo. There is a problem in connection of ethics as well as capitalisms, which is a major disadvantage of this theory to Lenovo (Parmar & et. al., 2010). Mitchell & et. al. Stakeholder Theory Mitchell & et. al. stakeholder theory is another stakeholder theory which has some advantages along with some disadvantages to Lenovo. This theory is based on three attributes such as power, legitimacy and urgency, which are important for the company and it is an advantage of Lenovo. It describes the controlling power of the stakeholders on the business like the responsibilities of the stakeholders to run the business in an effective way, which is an advantage of this theory to Lenovo. It helps in focusing on business ethics as well as the approaches of CSR and it is also an advantage of this theory (Reinmoeller, 2008). Along with the various advantages, there are several disadvantages of this theory, for instance stakeholders belong to a different culture and their thinking is also different. For that reason there might arise problem between the stakeholders at the time making decisions and also at the time of discussion. Therefore, each and every stakeholder should build the healthy relationship between them. Another disadvantage of this theory to Lenovo is associated with difficulties with respect to the management of stakeholders due to differences in their behaviours as well as attitudes (Stakeholders Salience, 2014). Corporate Social Responsibility Lenovo has several commitments to the employees and customers, which are considered as corporate social responsibility in Lenovo. CSR has also some advantages as well as disadvantages to Lenovo. It encourages the company to manufacture quality of products to meet the needs of the customers. It also helps facilitates in considering the welfare of the employees, such as to provide the safety working place for the employees. In addition, effective management of CSR programs would also facilitate Lenovo to build a strong reputation and strengthen valuable partnerships (Lenovo, 2014; Filho & et. al., 2010). The various disadvantages of CSR to Lenovo can be related to increased pressure to focus on the price, reliability, efficiency and availability of the product because these all are required for the sustainable growth of the company. It should look after the welfare of entire stakeholders rather than the employees of the company, which is a disadvantage of this theory to Lenovo (Lenovo, 2014; Hawn, n.d.). Conclusion From the above discussion, it can be stated that Lenovo is a multinational corporation that deals with manufacturing and distribution of personal computer worldwide. Lenovo has strong leadership in the market, which is one of the advantages of Lenovo. Along with the personal computers, Lenovo also has a good performance record in providing tablets. From the above discussion, it can be observed that Freemen’s stakeholder theory is a model of business ethics and the management, which explain the moral as well as values in managing the organisation. This type theory is essential for managing the entire organisation, along with the productivity. There are two types of stakeholders such as internal and external stakeholders. Internal stakeholders are managers, employees and owners. On the other hand, external stakeholders are customers, suppliers, financiers and government of the organisation. Another stakeholder theory, namely Mitchell & et. al. broadly explains the power of the stakeholder on an organisation. It also explains about the legitimacy or acceptability of the relationship within an organisation and the claim of the stakeholder on an organisation. This implies that the theory is generally based on three essential attributes such as power, legitimacy and urgency among others. CSR in the organisations operating in the current world has become an indispensable element. Organisations are embracing CSR goals and strategies to meet the needs of the community as well as ensure preservation of the environment. CSR in Lenovo predominately relates to the long lasting health of the company as well as the societies in which it operates Lenovo in order to meet the goals of CSR has revealed several commitments and has been focused on the delivering safe and superior quality products to customers as well as promoting the welfare of the employees. The actions of Lenovo Ombudsman office depends on four principles made by the International Association of Ombudsman (IAO) code of ethics such as ‘independence’, ‘confidentiality’, ‘impartiality’ and ‘informality’ among others. From the above conclusion, it can conclude these three theories are important for Lenovo. References Argandona, A., 2011. Stakeholder Theory and Value Creation. IESE Business School University of Navarra, pp. 1-15. Freeman, E. R. & Phillips, A. R., 2002. Stakeholder Theory: A Libertarian Defense. Business Ethics Quarterly, Vol. 12, No. 3, pp. 331-349. Filho, J. M. S. & et. al., 2010. Strategic Corporate Social Responsibility Management for Competitive Advantage. Brazilian Administration Review, pp. 294-309. Gago, F. R. & Antolin, N. M., 2004. Stakeholders Salience in Corporate Environmental Strategy. Corporate Governance, Vol. 4, No. 3, pp. 65-76. Hawn, O., No Date. How Social Legitimacy Helps Overcome Low Home Country Legitimacy: Corporate Social Responsibility and Emerging Market Multinationals. Boston University School of Management, pp. 1-44. Jeffery, N., 2009. Stakeholder Engagement: A Road Map to Meaningful Engagement. Cranfield School of Management, pp. 7-47. Johnson, G. & et. al., 2008. Exploring Corporate Strategy. Pearson Education Limited, Lenovo Group Limited, pp. 4-58. Lenovo, 2009. Built To Last: Sustainability for a New World. Sustainability Report Lenovo Group Limited, pp. 1-57. Lenovo, 2010. Sustainability for the Next Generation. Corporate Social Responsibility Report pp. 1-61. Lenovo, 2012. Corporate Social Responsibility Fast Facts. Lenovo CSR Fast Facts, pp. 1-6. Lenovo, 2014. The Lenovo Experience. Building a Better Way, pp. 4-196 Lin, S. M. & et. al., No Date. Lenovo: Competitive Strategies for Dominance in the Corporate Market. Lenovo, pp. 1-15. Mitchell, K. R. & et. al., 1997. Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What really counts. Academy of Management Review, Vol. 22, No. 2, pp. 853-886. Parmar, L. B. & et. al., 2010. Stakeholder Theory: The State of the Art. Cambridge University, pp. 1-607. Reinmoeller, P., 2008. Contextualizing CSP Strategy: To Adopt, Adapt, or Integrate International CSR Practices. Journal of International Business Ethics, Vol. 1, No. 1, pp. 21-35. Stakeholders Salience, 2014. Stakeholder Analysis, Project Management, Templates and Advice. Stakeholder Management eBook and Real World Templates. [Online] Available at: http://www.stakeholdermap.com/stakeholder-analysis/stakeholder-salience.html [Accessed December 31, 2014]. Verhezen, P. & Morse, P. 2010. Consensus on Global Governance Principles. Journal of International Business Ethics, Vol. 2, No. 1, pp. 84-101. Read More