In the recent business world, managers are constantly involved with the allocation of the corporate resource to what they prefer to call as doing well. Doing good can be costly in most cases. This is normally brought by the fact that at the point that an individual is doing well, they will be doing I at the expense of the business. Also, the reward that is b rough by doing well cannot be seen instantly. It does not come that quick in business. This, therefore, begs the most question that everyone seems to be asking, what is it that justifies why any manager would be involved in allocating the scarce resource of an organization to doing good? Recently, there has been illustration a d discussion on the corporate citizenship. This has since proposing a fusion of two arguments.
First, the spect of citizenship portfolio has been viewed as an aspect which helps to integrate the companies into the social fabric that exist in the society and local communities. It is seen as an aspect which can truly strengthen the bond that an organization has with the community. On second thought it has been exclusively used as a tool to build up the equation of an organization in society in which it operates. This has over the time created a lot of reputational capital for the firm. As such, it enhances the ability of an organization to negotiate more for attractive terms with both the suppliers and the government. All these benefits have been seen to be in line with the corporate citizenship and as one of the strategic tool that any manager will definitely use so as to cope up with some of the bi-directional tasks that a given organization could be facing. From the article that has exclusively look at the befits from all Angele is Forerun, C. J., Grasberg, N. A., & Barnett, M. L. (2000). Opportunity platforms and safety nets: Corporate citizenship and reputational risk. Business and society review, 105(1), 85-106. This paper therefore will analyze some of the benefits and the stakeholder which have been highlighted in this particular article.
The article starts by addressing the five most complementary motivations which the managers used to pursue citizenship activities. The first motivation as to why managers will engage in this activity is to build community ties and by doing so they maintain their license to operate in the community. Secondly, the activity of citizenship is viewed as a morale booster and also seen as attachment of the current employees. Third, it is used by managers to both prepare and attract potential employees. Fourth the concept of citizenship has over the time used by the managers to developed potential customers. Finally, it is considered as a tool which when effectively used can enact an environment where an organization can easily prosper.
However, as much as the activity can be seen to be beneficial to the organization, it both bring s reputation and risk. In most cases, the aspect of corporate reputation in the community is a cognitive representation of an organization's actions and can also be viewed an s results that crystallizers the company able to deliver it mandate to its customers and any other stakeholder that could be directly involved with the operation of the business. In certain occasion, there are significant chances that expected outcome might not be delivered. When this is the case, the n the dame to the company in most cases will manifest itself through a decrease in revenues, less attrition of capital and finally, it can lead to a reduced appeal to the potential employee. In light of this, the article views the reputational capital as the value of an organization which is seen tube at risk in everyday integration with its stakeholders. As explained by the writer, the aspect of reputational capital tend to be fluctuating in the equity market. This is brought by the fact that the stakeholders will be seen to be withdrawing their support from the company (Forerun, Grasberg & Barnett, 2000).
The concept of reputational capital is normally created when the managers are able to effectively convince the employees to work hard in the organization, investor to purchase the company's stock and customers to buy the firms products and services. According to the article, the concept of reputation capital will tend to grow when managers of the company induce and reporters so as to praise the organization and by doing so recommends its share. On the contrary, the same concept can be hardly destroyed when the available stakeholders in the organization withdraw the kind of support that they are offering because they have lost confidence in the firm's management, its products, jobs, and prospects. The potential loss that erupts when the stakeholder withdraws is what is known as the reputational risk. According to the article it can as well be defined as the range of possible gains and losses which are available in reputational capital for a particular organization.
There is always the brighter side of everything as attributed by the article. Despite the type of opportunities and risk that a firm might be good in when involved when they engage in citizenship, there are numerous that comes with it as well as explained in the motivation above. In light of this managers should be able to constructively build an opportunity platform through the concept of corporate citizenship so as to realize its significance to both the organization and the society at large. As attributed by the article, the effective citizenship programs tend to heighten the stakeholder's support that is seen to be savvy firms can utilize to enact new opportunities in the market. An example which has been highlighted by the article is the JP Morgan.
The writer explains that the social corporate activities that the firm was engaged in the early 1990s made it have a large stock of reputable capital. The following year, the firm was actively involved in cooperation with the back as its underwriter because of the reputation that it had gained. In light of, it can be potentially seen that the citizenship programs that the firm had been entered in created a lot of potential gain for the firm. As such, it can be clearly deduced that citizenship tends to create a reputational capital. By the creation of these capital gain, they also provide a platform in which some other many opportunities may be realized. As explained by the writer due to the supportive social relationship that firms emerge in will in most cases, put it in more and better favorable option that it can effectively use to take advantage in the market that it might significantly use to grow. On the country, threaten some companies which are not involved into the citizenship programs, may end up lacking the strong relationship with the community in which they operate in and may end up losing in the reputational capital which comes with this kind of relationship.
Apart from being used as investment platform as seen in the case of JP, Morgan, the article also put it's clear that the aspect of citizenship can be effective as boundaries that can be used in spanning activities that sanitize employees to various environmental conditions. With a wider view of environmental perspective, organizations are easily able to adapt to various changing circumstances
The existence of citizenship program tends to increase a firm potential gain. This has been an achieved by increasing the firm's support from various stakeholders in the market. According to the article, each of the stakeholders in the market tends to offer unique benefit and foster the growth of reputational capital in an organization. The eight stakeholders that must be fully addressed according to the article include employees, community, regulators, customers, partners, investors, media and activist.
The first stakeholder to be addressed by the article is the employees. One of the factors which are driven from the employs is the promise of commitment. As explained by the article employs in any organizational set up tend tube having the highest potential impact when it comes to the company reputational capital. According to the article, the quality of their work in most cases will influence the quality of work which is evidently manifested in the type of products and services that are produced. At the time that tea will be interacting with t the respective customers, neighbor's coleus, friends and neighbors in the most occasion, they will only be conveying the importance and the merits of the company. By d owing so as illustrated by the article, they would have in essence advertise the company that they work for. Significantly, the majority of the employers will approve of the citizenship programs. Consequently, companies will be able to benefit from resulting increase which can be achieved by both the participants and non-participants motivations, morale, commitment and team work. This conceit has over the time benefited a company by availing reduced cost of hiring and training cost.
The second stakeholder is the customer. Company's engaging in n citizenship is likely to benefit from the loyalty which is offered by the customers. As explained by the article, the principle promise that firm is likely to get from the customers is the aspect of loyalty. Loyalty in, most cases, will result in repeat purchases and further recommendations. The article explains that thus programs will in most cases act like the adverting and promotional platform which a firm can use to reach out to more of r its customers. As explained by Dowling (2016), majority of the customers will be more willing to buy products and services from organization s which are actively involved in citizenship programs. In addition, these particular customers are also willing to pay a premium price for the goods and services which are being offered by the firm. One of the companies which have been on the record for benefit from customer loyalty because of its engagement with the community is the Johnson& Johnson.
The third stakeholder is the investor. For every business what an investor need is the promise of value. The writer brings into account how the investors will likely add to the firm reputational capital in both the short term and long term. The investors will end the reputational value of an organization if they speak favorably of the company. They can be addressing the first share, and could also be involved in the integration of the upward spiral in the oval company market value. As explained Dowling (2016), first that normally do good will, in most cases, created a positive word of mouth, have an increased market value and will witness an increase in the purchase of its shares. Furthermore, engaging in citizenship can also help in the lowering of the cost of capital. By doing so it is likely to enhance the economic return soft company. This has over the time been achieved by favorable recommendations which come from the potential investors of the company.
Also, this investor could be living in the same environment as the business. In light of this, they will be the first-hand witness of the citizenship activities that firm is involved with. When this is the case, they are likely to get captured by the values of accompanying and will be more than willing to trust them with their funds. An example of an organization n which has been getting most of its investment dollars by participating in citizenship activities is the Ben and Jerry Company. As explained by Dowling (2016), the investor if this particular company normally prefer social responsibility over higher returns. In light of this, as much as the return of the firm is blame the industry average, Ben & Jerry...
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