In any company or organization there exist those who affect or are affected by any action that the company intends to make and are referred to as stakeholders. A company like the Earth plc have such individuals, groups or organizations stakeholders that are characterised in different categories including stockholders, local communities, environmental regulators, employees and trade unions. The different stakeholders hold varying importance to the company; for example, the shareholders are considered as the owners of the company and the firm has fiduciary duty to put their requirements first (Schien, 2004). Others stakeholders follow a certain criteria in grouping them regarding their importance which entails using the stakeholder theory to indentify and group them in accordance to their importance and needs. In the case study, Earth plc company’s bottlenecks include internal conflicts, shareholders dissatisfaction and an accident that brought about the company’s reputation being distorted. A company’s business impacts many both outside and the inside and with the right knowledge of the stakeholders and their needs the company will be on the positive direction. Indentifying the stakeholders is the starting point to understanding them better having been built upon a number of theories which shapes the relationship between the management and the owners of the company. One of these theories is social science stakeholder theory which is based on concepts of justice and social rights having a major effect on the way stakeholders exert moral suasion over project development or change initiatives (Burton, 2004).
This theory is broad and its consequences are wide spread since there are so many ways in which a project can affect a range of people. Others include instrumental stakeholder theory, convergent stakeholder theory which will give ways in visualising stakeholders and their influence to the future projects strategies. A stakeholder’s influence identification can be tackled in various stages, they include unveiling the existing stakeholders, understanding the nature of the stakeholders’ interest, measuring the stakeholder’s interest, predicting what the stakeholder’s future behaviour, his or her satisfaction and evaluating the effects of the stakeholder’s behaviour on the project (Cleland 1999,p.151). A practical way to identify this influence is by the use of the management methodology of planning, organising, motivating, directing and controlling. The process begins with visualising the stakeholders which involves listing them along one affiliation and listing the significant stakeholder interest along another axis of the table then indicating the determined magnitude of their interest. Furthermore, the expansion of the idea can be achieved by applying some of the risk management assessment probability method (Driskill, 2006). However this approach has had critics since it’s a two dimensioned idea leaving out other factors like the nature and the timing of feasible responses. This being the first step in identifying the impending influence of a stakeholder interest the approach can be used in the determination towards the formulating success criteria measures with an overall success of the project (Fairfield, 2001). The next step is the more detailed stakeholder circle concept which involves a greater degree of graphical imagery having to include aspect like the power of joining together small stakeholder becoming a great influence to the project. Also the strong stakeholders but distant from the project are considered in this stage hence eliminating the shadowy effect by the managers on these stakeholders. According to Schien (2004), the way to identify these relationships and influences is by using the normal qualitative research methods which entails interviewing people, having a look at the company’s directories and websites. The stakeholders will always get involved in influencing strategies formulation of a company to guide its future flow and cannot be ignored. These stakeholders can be indentified and the influence they pose to the company’s future be established as a first step in laying out a good strategy for a bright future of the Earth plc.
Individuals like employees are one of the basic stakeholders and should be treated to their job qualifications and satisfactory compensation in terms of salary. Undermining this has obviously reduced production of the Earth plc company since there is no motivation to the employees. Moreover, managers must possess keen analytical and intuitive skills making it possible for them to indentify principal stakeholders and facilitate a harmonious working condition (Cameron, 2006). Stockholders are the most valued stakeholders of a company and a lot of emphasis should be to them and always maintaining a good relationship with them knowing that most are lured to buying shares due to high profits. Due to the poor performance of the company its shares might not acquire the required demand hence less stockholders resulting to inadequate capital to undertaking the intended projects by the Earth plc. Therefore, a better understanding of their expectations and influence on the project’s success if attained maximises the stakeholders’ positive input and the chances of potential detrimental impact are reduced (Driskill, 2006). In addition the Earth plc company will also have to consider the different operating grounds and governments in various countries and formulate a strategy that abides by the laws of those countries. With the Earth plc, stakeholders and the management relationship has been left out only focusing more on the cost, time and quality management.
The distorted picture of the company has been worsened by the Australian accident that has seen the company criticised by the government, local community and environmental organisations due to the environmental degradation. It’s obvious the company will have to compensate the community, abide to some new government regulation which reduces its capital reserves affecting the share price hence a major blow to the smooth running of its projects and strategies in the region resulting to poor profits in future or even lead to its closure (Mitchell, 2002). With problems which include low share price, low production, distorted name and poor strategy formulation the company has found itself between a hard surface and a rock trying to form an alliance with other companies. The culture of a company according to Schien (2004) can be described as psychology, beliefs, values and attitudes that create the internal relationships in an organisation and the existing stakeholders. This is one of the most important aspects in determining a company’s success or failure which is vested on the strength of an organisation present culture. The culture of an organisation can be flexible or stagnant, dynamic or conservative giving a much emphasis on the external and internal environment affecting them (Fairfield, 2001). The culture of an organisation can be influenced by a number of factors which can be grouped in three groups namely, indirectly influencing factors to organisational culture, directly influencing factors and leader’s impact factors.
Factors indirectly influencing the company’s culture include the economical status, social-cultural, political-legal matters, the environment and the technological state of the company. The micro-environment factors affecting the company’s culture is constituted of the consumers and customers and other partners (Driskill and others 2005,p. 53).The last influential factors are contributed by the leaders of the organisation and include beliefs and values. Although the culture of most companies is deep rooted like the Earth plc and might seems difficult to alter or change it, with proper understanding of its contents it very possible to change it. The first step is trying to get a better understanding of the existing culture in the company through research and qualitative methods which will involve the interviewing of all the members of the organisation. The next will involve looking into the weakness of the present culture; once having gathered as much information as possible from the management of the Earth plc company and its employees the culture can be identified (Mitchell, 2002). The adversely affecting contributions to the company are sorted out for further review and if they affect the performance of the company the managers will definitely have to either withdraw or modify them to meet the required work satisfaction. The Earth plc company should try as much as possible to have all of it strategies involve all the required individuals, groups and organisation.
The shareholders power should be recognised in a big way since they are the backbone of this company. Other absent but good culture can be introduced in the company, things like enhanced communication between management and employees to solve issues would prove to be an added advantage to the company’s efficiency (Luthans, 1989). All the regulations by the government and environmental campaigners should be met to provide the company with an appealing environment in the operating grounds. The company should also take any responsibility of environmental degradation and have mechanisms to protect the community around their mining areas. Moreover, a mechanism should be established to monitor the culture of the Earth plc and matrix of organisational culture management to avoid its deterioration. Finally, the workers at the Earth plc should be given the deserved treatment to avoid the feeling of discontentment working with the company which improves performance hence high profits to satisfy the stockholders. With this being considered, the company will be reaping the best from its efforts and the different stakeholders will have healthy relations with the Earth plc company.