Schmidt Gift and Novelties, Assessment Example

Stakeholder Demands

There are a number of specific demands that are made by stakeholders. The most prominent issue is the fact that the company uses excessive packaging material. This can lead to the demands from the shareholders to reduce the amount of material the company uses in its packaging. This has considerable implications on the operational costs and the marginal costs associated with production. The media is crucial stakeholder that demands the truth behind the company’s operations. The media seeks to uncover the truth and inform customers of the practices of company’s within the market. The media demands transparency in the company’s operations.

The Non-Governmental Organization (NGO) seeks and demands fair trade from all participants within the market. The NGOs demands that the company observes its obligation and duty by fairly recognizing the community within which they conduct their operations. This is with regards to fair compensation of employees, in this case, women, relative to the company’s revenue and profitability. Environmental NGOs (ENGOs) demand that the company observe its obligation towards sustainable operations. The rate at which the company’s uses raw materials for packaging would eventually lead to an unsustainable production system.

Issues to Consider

The company and its management has to consider a number of issues that the company has to consider in order to address these concerns. One of the most important things is cost; this is integral in all aspects of the company’s operations as it determines the scope and depth of any kind of operations conducted by management. It essentially determines the limits of the company’s operations relative to profitability. The company has to determine how much it would cost to remedy the concerns raised by the NGOs as well as determine the benefits that can be realized by these responses. The company has to take into consideration the cost-benefit analysis of remedying each concern.

The company employs a logistics and supply chain that facilitates it with required raw materials for production. The company has to take into consideration how the concerns raised and their possible remedies may have on their supply chain. This will essentially affect the company’s operational strategy.  The company also has to take into consideration the implications of the raised concerns and their plausible remedies on the company’s targeted growth initiatives as well as its goals and objectives, both in the long-term and in the short-term.

NGOs Remedy

The NGOs are prepared to develop their own remedies should the company fail to effectively respond to the concerns they have raised. The environmental agencies can engage in campaigns that will seek to raise awareness of the company’s operations (Dibie & Dibie, 2012). This would significantly out doubt within the market about the organizations operations, in effect attracting negative publicity. This negative publicity is what organizations employ to instigate companies to transform different aspect of their operations to ensure environmental and production sustainability in the long-run.

The organization can also openly and publicly challenge the company’s labor and human rights record in public. This would significantly cause pressure on the organization, forcing it to either succumb to their demands, or face considerable negative effects on its profitability. While this would be a last resort, NGOs would generally provide the organization with time to remedy their actions.

The NGOs can alternatively seek to engage the civil society in a bid it develop policies and regulations that would set standards within the market. In this case, the NGOs, with the help of the civil society, would develop a number of policies that would set the required industry standards for packaging. This would place a limit on the amount of material the company uses in its packaging.

The Powers of NGOs

NGOs have in the last decade developed considerable powers that make them a considerable force within all sectors. These powers grant them the ability to influence change or instigate barriers and regulations within a given industry of concern. (Dibie & Dibie, 2012) The NGOs in this case have the power of much higher levels of democratization. This gives them considerable recognition and influence within the civil society. With the backing and support of the civil society, NGOs have the ability to instigate changes to the company’s operations.

NGOs also have the support of customers within the market. As industries increasingly become competitive in the face of the globalization phenomenon, malpractices have been on the rise in a bid to increase profits regardless of implications to the environment and the well-being of market players. This has resulted in the increase in demand for information and analysis on the credibility, safety and social consciousness of business operations by the companies and other related corporations within the industry.

NGOs realize considerable power in the ability to mobilize campaigns that seek to instigate change within the industry. This is largely owing to the dramatic increasing globalization of NGO funding. With the financial resources required to develop policies and mobilize action, NGOs have considerable power to cause the company to change its operations.

Media

The media can have a number of reactions whether Schmidt Gifts and Novelties, Inc. takes any action to remedy the concerns raised or not. The media can adopt an informative approach detailing the concerns raised by the NGOs and any actions taken to address these concerns relative to the industry trends. This is an informative and somewhat neutral approach (Turska-Kawa, 2011). However, the media can adopt a more aggressive approach highlighting all the concerns highlighted by the NGOs as well as a call for action by the civil society, instigating change.

Affected Stakeholders

There are a number of stakeholders that are considerably affected by the demands by the NGOs. The most affected would be the company as a result of its operations. Should these demands be enforce, the company would have to significantly transform its production process, i.e. packaging, as well as it human resource management policies, i.e. compensation for female workers in its area of residence. The female workers highlighted in the NGOs concerns would also be significantly affected. Remedies to these concerns would significantly improve their working conditions.

Management is also considerably affected by these demands. The CEO, PR and Marketing managers have to develop innovative ways to reduce the amount of material used in their packaging. Furthermore, they have to develop a compensation system that ensures adequate compensation of the female employees while ensuring that the business mitigates its operational costs. The PR Manager has to develop strategies that would improve the company’s public image, relative to the effects of the concerns raised by the two NGOs. Management has to provide direction and leadership on the best way forward, relative to the effects of the raised allegations and the prevailing market conditions.

References

Bryant, J., & Oliver, M. B. (2009). Media Effects: Advances in Theory and Research. Routledge.

Dibie, J., & Dibie, R. (2012). Non-Governmental Organizations (NGOs) and the Empowerment of Women in Africa. African &Asian Studies, 11(2), 95-122.

Gök, O., & Hacioglu, G. (2010). The organizational roles of marketing and marketing managers. Marketing Intelligence & Planning, 28(3), 291-309.

Turska-Kawa, A. (2011). The (dis)alienating function of the media. the role of mass media in building a civil society. Psychology pf Language and Communication, 15(2), 175.