Red Gold Stakeholder Analysis - Case Study Example

Name Tutor Course Date Business Analyses Red Gold Case Stakeholder Analysis Red Lobster is a chain of restaurants owned by Darden Restaurants. It is the leading casual dinner restaurant globally. In this business analysis, several of its stakeholders are mentioned. Their attributes, stakes, responsibilities and the recommended actions that should be carried out are mentioned. The situation being analysed is case of bad media coverage but it shows an ethical issue that Red Lobster should be involved in correcting. I have come up with this stakeholder analysis with an explanation of each of the points (Darden Restaurant, 2006). Shareholders In analysing the shareholders of the red lobster, their main stakes are ownership, interest and rights. As the shareholders they have a right and the interest to be involved in the operations of the restaurant because they are the financers and main beneficiaries. Their financial input is used by the restaurant to enhance business. The factors that affect the restaurant will directly affect them and hence they are incorporated in the entire decision making and budgeting plans of the company. They should therefore be the first to be informed of the case of the divers so as to come up with the right action on the main issue. The stakeholder attributes are urgency, legitimacy and power. Shareholders are the owners and have a legitimate claim on the progress of the company. They also have the power to change matters that regard the company depending on the progress. Since they are the owners, the company management team is answerable to them and must answer their concerns with urgency. Red Lobster has economic, legal and ethical responsibilities to its shareholders. Firstly, the company must ensure that the money invested by the shareholder is not wasted. It therefore ensures that profits are made. The economic relationship between the two must be good to avoid selling and dropping of shares or similar factors. Additionally, Red Lobster has legal and ethical responsibilities because the company actions and decision must be within the set laws and standards to avoid legal and ethical issues. The best action that Red Lobster can take is the collaborative action which requires the shareholders and the management to work together in handling the bad media coverage. The decision that is arrived at by the two must thus be implemented to handle the ethical issue faced by the diverse (Berman et al, 1999). Customers These are primary stakeholders because they are the driving force behind the economic prowess of the company. Their stakes are interest and rights and Red Lobster should consider them to be legitimate, urgent and powerful. In every company, the customer is the main part. They are the ones that drive the demand for lobsters and the business. The absence and decline of customer numbers will lead to business failures and the overall collapse of Red Lobster. They are therefore urgent and powerful. Customer feedback on the company must be handled with urgency. They are also legitimate because the company is aimed at meeting their needs. Red Lobster has ethical, economic and legal responsibilities towards their customers. The economic responsibility is the company must always ensure value for money for the customer products. The products sold to them must also be within the set laws and ethics of the restaurant business. All products must be prepared in a safe and hygienic environment. They should also receive the best service that is morally accepted. The best action to be used in handling the customers is collaborative. Additionally, they may involve the customers in finding the solution to the issue. The company should use the relevant media to communicate to its customers and handle their questions with regard to the issue. It may also have to pick suggestions on how to handle the issue from them. A collaborative approach in handling the issue will retain and increase the customers compared to all other actions. Table 1: Red Lobster Stakeholder Analysis RED LOBSTER STAKEHOLDER ANALYSIS STAKEHOLDERS STAKES ATTRIBUTES RESPONSIBILITIES RECOMMENDED ACTIONS Stakeholders Interest Right Owner Legitimate Power Urgent Economic Legal Ethical Philanthropic Collaborative Involve Defend Monitor Shareholders X X X X X X X X X X Customers X X X X X X X X X Environmental body X X X X Employees X X X X X X X X X Non profit organization X X X X Media X X X X X X X X Legal community X X X X X X X Divers X X X X Community X X X X X X X Government X X X X X Environmental bodies The stake of the environmental body is interest. The main concern for the body is environmental conservation and thus it is interested in ensuring that Red Lobster is not enhancing environmental degradation. The company should view them as legitimate and urgent. All environmental matters that are raised should be considered urgent because if they are not handled the company will be affected negatively. Therefore, the environmental regulations of South America and United States must be obeyed. Red Lobster holds legal and ethical responsibilities to the environmental bodies. The company must adhere to set laws and ethical regulations set. This will include reduced depletion of lobster from the area and consideration on how to improve the working conditions of the divers. The best action in handling them will be collaborative. They could agree on limits of lobsters fished on a daily basis to reduce exhaustion and reduction of lobster numbers that is affecting the divers (Flammer, 2012). Employees In the Red Gold Case, the employees that are stakeholders and their stakes are interest, ownership and rights. Their attributes are powerful and legitimate. After the customers, the employees are second in ensuring the success and growth of Red Lobster. They are powerful because if all employees restrained from work, Red Lobster will collapse. They can make changes to the company and have the right to appropriate working conditions. The company has ethical, economic and legal obligations to its employees. Legally, they are expected to adhere to labour laws and provide safe working conditions for the employees. Economically, the company is expected to pay its workers for labour done, overtime and provide additional relevant benefits such as health care and social security benefits. The company should not neglect its workers but be directly involved in the wellbeing of its employees. The beast approach in handling its employees is the collaborative method that will allow the company to be directly involved in the lives of its stakeholders (Crosby, 1992). Non-profit organization The non-profit organization, Sub Oceans Safety, is also a stakeholder in Red Lobster. Their main stake is interest. The company should view it as legitimate. This denotes that the company should not be involved in intervening in their activities to improve the working conditions of the divers. The company has ethical responsibilities to the organization and can be involved in the activities of the organization so as to improve working conditions of the divers. Their involvement in the work of the organization will increase its customers (Freeman et al, 2010). Media The media is a stakeholder whose stakes are interest and rights. Red Lobster should view it as legitimate, urgent and powerful. The media functions to inform people on Red Lobster. It therefore has the power to change the perspectives of its customers and define the economic progress of the company. The company should also be willing to handle all matters and questions raised by the media as they are a point that the public relies on for information. The company has ethical and legal responsibilities to the media. Legally, it is expected to use the media to relay important Red Lobster information that should be delivered to the public. Ethically, the company is required to treat the media with utmost respect. The best approach in handling the media is monitoring. Since the media has the power to affect the public opinion of Red Lobster, it should monitor all media actions and respond early. Divers The divers are also stakeholders. They have the interest and a right in the actions of Red Lobster. The company should view them as legitimate. The divers are the central part of the company although they are not their employees and thus the company should be interested in their wellbeing. The company has legal and ethical responsibilities to them. The ethical responsibility is to ensure that the divers work within the set laws and are in a safe environment. The legal responsibility is to ensure that there are laws set on lobster diving and they are adhered to by the divers. The best approach in handling the issue is the involvement in creating safer working conditions for the divers. This may include donations to the non-profit organization and supplying of better equipment. Additionally, the company could increase the buying price of the lobsters in order to increase payments for the divers. It is important that the company is directly involved with the divers. Legal Bodies According to Flammer (2012), legal bodies are stakeholders in the company and the main stake is interest. Red Lobster should consider them as legitimate, powerful and urgent. The legal community is powerful because it can create laws that will limit the company’s productivity. It is legitimate as it is expected to monitor the company’s activities. It is also urgent as the company is answerable to it. The company has legal and ethical responsibilities to the legal bodies. It is sad that in South America there are no laws regarding dividing and lobster hunting. The situation can change if the legal bodies in the United States are directly involved in the coast. However, as the main beneficiary of the fishing, Red Lobster should ensure that the source of its lobster adheres to relevant laws (Schmeer, 1999). Government The governing body of the United States also has interests and rights in Red Lobster restaurant. It should be viewed by the company as legitimate and powerful. The government is the main leadership and has the power to change policies that affect the operations of the company. The company has legal responsibilities to the government. It should pay its taxes; adhere to the federal laws and work within policies that govern their area of expertise. The most effective approach is a collaborative approach. This will ensure that the authoritative government does not have controversies with the company (Berman et al, 1999). Community The community in which Red Lobster is based is another stakeholder that has the stake of interest. The company should view them as legitimate and urgent. The company has an obligation to community and has to adhere to set community roles and laws. It is also answerable to the community and must inform the community on issues that will affect the community. The Red Lobster restaurant has legal, philanthropic and ethical responsibilities. The restaurant should be involved in community actions and social responsibility actions. It should also mobilise its employees to participate in community actions. It is also expected to provide employment opportunities for its residents (Jamali, 2008). Legally, the restaurant is expected by the community to respect all community laws. Ethically, the restaurant is expected to care for its community. It should also preserve the culture and heritage of the surrounding community. The approach in handling the community is collaborative. The restaurant must work with the community. This requires constant communication with the community on matters that affect them and the involvement of Red Lobster in community activities. Works Cited Gleick, James. Chaos: Making a New Science. New York: Penguin, 1987. Print. Berman, Shawn L., Andrew C. Wicks, Suresh Kotha, and Thomas M. Jones. "Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance." Academy of Management journal 42, no. 5. 1999. 488-506. Crosby, Benjamin. Stakeholder analysis: a vital tool for strategic managers. USAID's Implementing Policy Change Project, 1992. Flammer, Caroline. "Corporate Social Responsibility and Stock Prices: The Environmental Awareness of Shareholders." In MIT Sloan School of Management. Online verfügbar unter http://www. corporate-sustainability. org/conferences/fourth-annual- researchconference/Flammer. pdf. Zuletzt geprüft am, vol. 14, p. 2013. 2012. Freeman, R. Edward, Jeffrey S. Harrison, Andrew C. Wicks, Bidhan L. Parmar, and Simone De Colle. Stakeholder theory: The state of the art. Cambridge University Press, 2010. Jamali, Dima. "A stakeholder approach to corporate social responsibility: A fresh perspective into theory and practice." Journal of business ethics 82, no. 1 (2008): 213-231. Restaurants, D. Darden Restaurants Annual Report 2006, 2006. Schmeer, Kammi. "Stakeholder analysis guidelines." Policy toolkit for strengthening health sector reform (1999): 1-33. Read More