Stakeholder Theory and the Nature of the Firm-myassignmenthelp

Question: Discuss about theStakeholder Theory and the Nature of the Firm for Goods. Answer: Stakeholder Theory and the Nature of the Firm The stakeholder theory in todays era is one of the most commonly used concept in business. According to this theory, this main purpose of a particular business is the creation of values for not only the shareholders, but for the stakeholders as well (Harrison Wicks, 2013). In the context of sustainable business practice, a stakeholder may be anybody ranging from a government body, investor, any political group, consumers, the employees or the trade unions. The external factors such as economy, competition, politics and customers and suppliers, and the internal factors including money, culture of the company, and staff has the potential to affect a the sustainability of a business in their own way. For example, the commitment from the higher management is one of the major factors that integrate the sustainability and the business practices as this helps in creating a business strategy around the sustainability. The paradigm change required in the transformation of business sustainability includes a significant shift right from the company leaders to the consumers as the scale of planetary crisis is enlarging. Reductions in using toxic chemicals, reduction in packaging, retooling for the efficiency of energy, taking green initiatives, recycling and conserving energy are the basic steps that must be taken by every business (Smith Offodile, 2014). The framework for supporting business sustainability has three important areas for consideration and they are fair and responsible banking, economic and social participation and sustainable growth. References: Harrison, J. S., Wicks, A. C. (2013). Stakeholder theory, value, and firm performance.Business ethics quarterly,23(1), 97-124. Smith, A. A., Offodile, O. F. (2014). Green corporate initiatives: a case study of goods and service design.International Journal of Logistics Systems and Management,19(4), 417-443.