1. Organisations, Corporations and their Stakeholders

Business

Any organisation engaged in making a product or providing a service for profit.

Society

Human beings and the social structures they collectively create.

Business and Society Relationship

A highly interdependent relationship in which business and society influence each other and form an interactive social system.

Interactive Social System

A system in which businesses and society continuously interact and affect one another.

General Systems Theory (GST)

A theory stating that entities cannot be understood in isolation but only in relation to their surrounding environment.

Business Embeddedness

The idea that businesses operate within a broader social environment and constantly interact with it.

Ownership Theory of the Firm

The view that a firm is the property of its owners and should primarily maximize returns for shareholders.

Shareholder Theory

The belief that the main purpose of a corporation is to maximize long-term value and profits for shareholders.

Stakeholder Theory of the Firm

The view that a corporation should create value for society and consider the interests of all stakeholders.

Corporate Purpose

The fundamental reason a corporation exists; under stakeholder theory, it is to create value for multiple stakeholder groups.

Stakeholder

A person or group that affects or is affected by an organisation's decisions, policies, or operations.

Stake

A claim, interest, or concern in a business enterprise.

Stockholder

A shareholder who owns shares in a company and represents only one type of stakeholder.

Stakeholder Network

The web of relationships connecting a business with its various stakeholders.

Market Stakeholders

Stakeholders who engage in direct economic transactions with the company.

Primary Stakeholders

Another term for market stakeholders because they are directly involved in business operations.

Customers

Market stakeholders who purchase the company's goods or services.

Employees

Market stakeholders who work for the organisation and contribute to its operations.

Suppliers

Market stakeholders who provide resources, materials, or services to the company.

Creditors

Market stakeholders who provide financial resources to the business.

Shareholders

Market stakeholders who invest capital in the company and hold ownership rights.

Distributors and Wholesalers

Market stakeholders involved in delivering products to customers.

Non-Market Stakeholders

Individuals or groups that do not engage in direct economic exchanges with the firm but can affect or be affected by its actions.

Secondary Stakeholders

Another term for non-market stakeholders.

Communities

Non-market stakeholders affected by a company's activities within a specific geographic area.

Government

Non-market stakeholders that regulate and influence business activities through laws and policies.

Media

Non-market stakeholders that influence public opinion about a company.

Public Interest Groups

Non-market stakeholders that promote broader social interests.

Environmental Groups

Non-market stakeholders focused on environmental protection and sustainability issues.

Internal Stakeholders

Stakeholders employed by the firm, such as managers and employees.

External Stakeholders

Stakeholders outside the organisation, such as customers, suppliers, governments, and communities.

Stakeholder Analysis

The process of identifying stakeholders and analysing their interests, influence, and relationships.

Relevant Stakeholders

The stakeholders most affected by or capable of affecting a particular business issue.

Stakeholder Interests

The concerns, expectations, or desired outcomes stakeholders have regarding the organisation.

Stakeholder Power

The ability of a stakeholder to influence organisational decisions or outcomes.

Voting Power

The legal right to influence corporate decisions through shareholder voting.

Economic Power

The ability to grant, withhold, or influence economic transactions with a company.

Political Power

The ability to influence laws, regulations, or government actions affecting a business.

Legal Power

The ability to use legal mechanisms such as lawsuits to influence business behaviour.

Information Power

The ability to influence outcomes through access to valuable information or knowledge.

Stakeholder Coalition

A temporary alliance of stakeholders formed to pursue shared interests.

Stakeholder Salience

The degree to which a stakeholder is perceived as important by managers.

Power

A stakeholder's capacity to influence organisational outcomes.

Legitimacy

The perception that a stakeholder's claims or actions are appropriate and valid.

Urgency

The extent to which a stakeholder's claim requires immediate attention.

Stakeholder Map

A visual representation of stakeholder interests, power, positions, and relationships regarding a specific issue.

Boundary-Spanning Departments

Departments that connect the organisation with external stakeholders and society.

Collaborative Relationships

Mutually beneficial relationships developed between businesses and stakeholders through engagement and cooperation.

Dynamic Environment

The constantly changing external context in which businesses operate.

Changing Societal Expectations

Evolving public demands regarding responsible business behaviour.

Ethical Reasoning

The process of making decisions based on moral principles and values.

Globalisation

The increasing interconnectedness of markets, societies, and economies worldwide.

Government Regulation

Laws and policies that influence and shape business behaviour.

Natural Environment

The physical environment that affects and is affected by business activities.

Technological Innovation

The development of new technologies that transform business operations and stakeholder expectations.

Economic Objectives

The financial goals of a business, including profitability and growth.

Social Objectives

The goals related to creating positive impacts for stakeholders and society.

Stakeholder Value

The economic, social, and environmental benefits created for stakeholders.

Long-Term Success

The sustainable achievement of business objectives through balancing economic and social responsibilities.

Value Creation

The process of generating benefits for shareholders, stakeholders, and society as a whole.