Stakeholder management is a systematic identification, analysis, planning, and implementation of any engagement with the stakeholders (Wilson, 2016). Individuals with interest in a project or any kind of programs are indispensable when it comes to decisions made on their concern in a given organization. Thus, the outcome of the decisions made translates to either a positive or negative impact on them (Fernando, 2010). In organizations, different stakeholders have a direct or indirect bearing to the organization’s operations. Their involvement in the organization has a significant impact to the firm’s functioning and they can also be significantly affected by decisions made by the organization.
Impacts on the stakeholder groups
It is apparent that organizations entering new markets undergo both negative and positive impacts depending on the kind of operations engaged in, the type of market they join as well as the influence connected to the different stakeholders. In the case given, the public corporation with the decision to venture into the African market will hakhve a direct and indirect impact on various stakeholders. To the employees, it is evident that some employees will lose their jobs as the corporation offshore its manufacturing facilities to Africa (Fernando, 2010). The corporation is opting for this option because there is cheap labor in the African market. Thus, it considers the market ideal because of the potential significant profits margins. However, this translates to the loss of jobs amongst employees currently working for the corporation in the American market. When organizations venture into a foreign marketplace, it is evident that they have to undergo unexpected changes regarding their operations. Some countries have work conditions imposed on overseas organizations especially on the employment of the locals. Some governments specify the percentage of the employees to be sourced from the local market.
In light of this, it is evident that the corporation cannot export its current employees to the new market to work from there. Also, not all employees would want to work in a different country. Therefore, this evidence shows that the employees will undoubtedly lose their jobs (Wilson, 2016). Besides, the primary goal of venturing into the African market is to maximize profits because of the cheap labor available. On the other hand, the union will also be affected by this move since some of the benefits they used to have when the company operated in the American market would be different in the African market. Besides, the union can only control activities taking place in the American market but not those taking place in the African market. Many organizations in the contemporary world are working hard to develop and maintain a competitive advantage in a highly competitive market. One of the ways of achieving this objective is to ensure that the issue of corporate social responsibility has been executed. Thus, the communities in which the companies operate tend to benefit from this concept greatly. In this regard, it is palpable that the communities in which the company has been working in will lose some of the benefits accrued from social responsibilities offered by the company (Wilson, 2016). Nevertheless, it is evident that the African communities in which the company opts to operate from will benefit from the social responsibilities of the company once operations kick off.
Stockholders will also be affected in that there will be a shift of operations from the American market to the African market. Any individual with shares in the company may be affected by the move both positively and negatively. For instance, if the company fails in the African market and starts making losses, the stockholders will also experience losses. However, if the company makes profits in the new market, the stockholders will as well benefit from the same.
Recommendations
Business growth and diversification are essential to any organization. However, it is indispensable for companies to consider a few factors before making such decisions. For instance, it is imperative to conduct a critical analysis of the implications of the decisions made. In this case, the primary objective of the company was to increase profits by venturing into a market that has cheap labor. However, explicit market evaluation and research are vital to avoid adverse impacts associated with such a decision (Wilson, 2016). The other imperative factor to consider is the impact the decision will have on the stockholders. If the anticipated outcome of the move tends to have high chances of not doing well in the African market, it will translate to a loss to the stockholders. Therefore, the company should conduct comprehensive market research to avoid such scenarios.
On the other hand, the employees of the company will lose their jobs if the manufacturing stations are closed in the American market. In this regard, it would be advisable that the company consider opening subsidiary branches in the African market instead of closing those that are in the American market. Additionally, this will ensure that the communities that are benefiting from social responsibilities will continue doing so.
References
Fernando, A. C. (2010). Business ethics and corporate governance. Delhi: Dorling Kindersley (India), licensees of Pearson Education in South Asia.
Wilson, J. (2016). The Routledge Companion to Business History. New York: Taylor " Francis.
