By Comparison With The Other Factors, Evaluate How Important Stakeholders Are In Strategic Management.
The first intention of this paper is to give a clear understanding of key terms used throughout, helping illustrate their meanings and importance.
Strategy: Johnson et al (2005, p9) argues, "Strategy is the direction and scope of an organisation over the long term, which achieves an advantage in a changing environment through its configuration or resources and competences with the aim of fulfilling stakeholder expectations."
I feel that this gives a clear understanding to the term, as it involves the four key areas every organisation needs to manage; firstly, what areas the business wishes to operate within, i.e. that markets and its activities. Secondly, creating the advantage, the selling point, while recognising the environment it operates within is constantly changing.
R Lynch (2006, p7) concurs with time being an important feature of strategy, while developing a competitive advantage. Thirdly, the reliance on resources to create the advantage combined with the skills and knowledge to apply them. However, while I agree that the aim of strategy is to fulfil stakeholder expectations, I do not believe this is applicable for all stakeholders, this is confirmed by A Crane and D Matten (2004, p50) who state that a stakeholder "is harmed by, or benefits, from the corporation". This demonstrates that a strategy can adversely affect stakeholders, even if they have no prior awareness or expectation of an organisations strategy.
This definition of stakeholders is generated by A Crane and D Matten (2004, p50) from using Freeman's (1984) original definition and applying Evan and Freeman's (1993) suggestion of principle of corporate rights and ...