NELSON OLUWABUKOLA MICHAEL (NOM) asked:
The quest to discover who controls the organization is no doubt a crucial task for businesses in the modern world (even as it has been since ancient times). It is even more a task that determines how far the company goes – in terms of faring well financially and in the competitive market.
This has been made even more compulsory, especially in the ever-growing world of ‘vicious’ business competition – the competition of getting the highest consumer loyalty – winning the consumers.
The knowledge of where the power of organizational control lies puts the organization at an advantage in the competition for market dominion. Organizations which have failed to analyze and tap from the real source of organizational power have not only been subdued in the business battle arena, but have been stigmatized the most irresponsible business entities in the world. We should however realize that they are not so much stigmatized as irresponsible by competitors as they are by customers; even their own stakeholders.
Scholars who dare to delve into the area of organizational control have so far narrowed their discourse to corporate control and management control, little or nothing has been done to research the area of stakeholder control.
It may not sound so logical at first thought why organizations that established businesses, found the capital and organized production should still forge ahead, putting efforts into looking for where organizational power lies. Does power not belong to he who has the resources? Or is this an evangelism of organization to becoming slaves to customers?
The right thinking and up-to-date business manager would diplomatically agree that businesses more than ever are accountable to stakeholders and not the other way round.
To get even a clearer grasp of the issue of discourse, it is appropriate for organizations to take a pause and really consider for what reason they work round the clock engaging in one form of marketing activity or the other. Though most of these decisions are taken within the organization’s managerial board, it is evident that the bottom line of every marketing activity of an organization is to outdo its competitors in the market.
But then is this by merely working towards product development? This is definitely not the case. The tussle between competing organizations is to get a fair (or possibly lion) share of the customers in the market. It then pops up without obstruction that the only reason an organization can boast of standing tall among competitors is its command of a continual reputable brand equity, which of course can only be measured through the recurring loyalty of a massive market share of satisfied customers.
The ignorance of where organizational power is derived has been the cause for much business’s failure and more pathetically local and global community crises. The fact that most governments, industries and organizations have no clear vision of whether businesses exist for stakeholders or whether stakeholders exist for businesses has brought about a lot of controversies and instabilities to the economic activities of man.
It is not illogical to stipulate that the features of the popular circular of income model needs a revisit for proper and factual analyzes. The concept of the model appears apparently to have been taken more as mere money-determined transactional functions rather than a power/money-oriented transaction function.
In fact the reason for this could be that the power factor to complement land, wages, etc is missing in the circular flow link. And you may want to know what effect this error has on the stakeholder-organizational relationship; businesses are left to the mercy of selfish and ignorant whims of immature money makers erroneously tagged as business managers, and this has led to myriads of negatives such as irresponsible and corrupt governments, human rights predating industries and socially irresponsible businesses.
Obviously, the error in the stakeholder-organizational relationship chain is the one factor that has precipitated bloody wars, famine, underdevelopment, hardships and all sorts of sufferings to the human race. This high level of eccentricity is vital to be overcome; for it is how the company is perceived by the public that ultimately will determine the future of the organization.
When governments, industries and organizations begin to consider incisively the question of who owns the government; who does the industry exist for or who determines the continuity of the organization, there comes a shift from where organizational power or influence is derived. The structural direction of business becomes broader and the human face business, which is not only socially beneficial but profitable is created.
As most people may assume, however, it has not at all been the fact, that organizational power has all the while been derived from other sources than the stakeholders’ influence, rather, the case has been that businesses have only cashed in on the majority-minority societal imbalances – relying more on capital power than stakeholder power.
This anomaly has not only been theoretically dismantled, it has likewise been practically questioned and ferociously fought by organized stakeholder institutions. And this massive assault cutting across all spheres all life – governments, industries and businesses has exposed those governments, industries and businesses that are stakeholder conscious and those solely profit conscious (at the detriment of the majority stakeholders).
Over the last three hundred years, different organized and legally recognized stakeholders have developed into a number of forms, influenced by differing political and economic regimes. The immediate objectives and activities of stakeholders vary, but may include:
• Provision of benefits to members.
• Collective bargaining, where they are able to operate openly and are recognized by organizations and governments; they may negotiate with employers over wages and working conditions
• Industrial actions or strikes as means of resistance to lockouts in furtherance of particular goals.
• They may promote legislation favourable to the interests of their members or stakeholders as a whole. To this end they may pursue campaigns, undertake lobbying, or financially support individual candidates or parties for public office.
The stakeholder ever than before have come to be moved to the fore of the social/organizational consciousness as the determinant factor of power running the organization.
A stakeholder is an individual, a group of individuals, an institutional body or any form of human collaborations, serving at one time differing interests in the organization and at other times harmonious interests and whose activities can affect or be affected (either positively or negatively) by the activities of that organization.
By natural make up of the business environment, the firm functions at the center of the various stakeholders surrounding it; sending it limitless signals and expecting favourable responses from the firm.
By way of social operations, the stakeholders of an organization include the host community, customers, employees, suppliers, trade organizations, governments, competitors and other various social structures at the local and global levels.
The acknowledgement of these stakeholders as well as measuring, replying, anticipating and shaping their responses is the role expected of any organization that not only proves to be socially responsible, but that wants to achieve goodwill and priceless brand equity.
Brand equity and goodwill themselves being the greatest achievements of an organization, which could trigger financial profitability for it are determined
and measured by stakeholders’ opinion about that organization.
This fact however, seems in most cases to
have eluded the philosophies of most businesses and this happens at unaffordable peril. Worst still, some organizations, map out the stakeholder minority, whose interests are selfish and decide to gratify their needs at the expense of the majority of other stakeholders.
In many cases businesses in the private sector map out minority of stakeholders in the form of governments of host countries or of local communities as well as selected individual political jobbers, who demand bribe and are requited by the myopic business management in the affirmative. The result of such misdemeanors has been agitation from the stakeholders forming the majority and consequently out blown financial scandals spelling persecutions for the individual actors involved, but most pathetically, loss of goodwill and in most cases death of such organizations. The case of the Siemen’s scandal in Nigeria comes handy as a case study.
Gone are the days, which Max Weber would define as the days when organizations solely determine what is best and enough for the stakeholders. A time when there were no recognized or generally acceptable human collaborations that could operate on the premise of collective bargaining – a powerful tool in bringing organizations down to its knees.
Stakeholdership can take place on many levels, such as the “shop-floor”, the regional level, and the national level. The distribution of power amongst these levels greatly shapes the way an organization functions.
The current trend is that stakeholders who themselves could be but not limited to part owners of business capital determine what the business must do, and such benchmarks are closely and passionately monitored. It thus becomes the utmost business of every business to create customers; and this too is politic to supercede the quest for creating profit. As Peter Drucker mused “ Companies are defined by the customers they createâ€, in essence, the fuel that motivates the companies to put up various promotional or marketing activities is basically for the purpose of getting the customers’ attention.
As put by a business scholar – “to create a customer means to connect a customer to a larger part of himself or herself through the brandâ€. This implies that every organization that wishes to be a market leader must be wholly committed to customer development – making the customers feel a strong sense of belonging to the business as much as seeing the business as an extension or bridge connecting them to their life desires.
A handful of Nigerian banks are fast seizing this initiative of customer development through various product and corporate re-branding activities as well as various customer satisfactory marketing designs. This is well expressed in their adverts, mottos and signatures.
Good business managers go to the drawing board seeing themselves as young beautiful ladies who wants to have a successful life in term of comfort from riches and love from the right man. The wise lady would put up all sorts of gestures, make-ups, flirting and subterfuge if possible to get the attention of a target man, who’s got the money also or the prospect of giving her the comfort she cherishes. In the end if she succeeds first in getting the right man, she would have fulfilled love and the comfort of riches. The foolish lady goes headlong looking for riches at the expense of true love. She gets all the riches, but from men who have no loyalty to her, and in the end she regrets her actions and perhaps loses all that she has amassed. This analogy aptly describes businesses-stakeholder relations.
The shrewd business manager courts the right men to win their love and tap from their domineering powers in order to get their assurance of giving her a fulfilled life. The myopic business manager courts the men who have got the pay for as long as they can afford. He fails to win their loyalty.
Businesses that want to grow into market leaders are expected to commit more to investing time and other necessary resources into the brand team. Since creating customers is a central part of the brand mission. The process of creating customers itself is a strategic process stemming out of comprehensive market research aimed at value creation.
When a business commits itself to and is successful in the area creating value through customer satisfaction, it disrupts competitors and makes its customers see competitors of the business as their own rivals, in same vein they see themselves as advanced beyond the reach of those competitors with assurance that the business they are loyal to will not fail to deliver new forms of value making competitors irrelevant.
Any organization that fails to identify and consider its satisfaction as the satisfaction of its stakeholders is no organization and would soon be fished out and sent to the grave where other ignorant organizations are buried.
The crux of this discourse is simple and must be seen so, especially by business managers who want to stand tall among reputable businesses in the competitive global market.
Organizational control power lies with the customer and could only be enjoyed by the business that recognizes it so. The business manager who continues to act under the guide of this philosophy is the winning manager.