Corporate Publics and their Concerns
Areas of Concern
Employees of all ranks
Banking community and other lenders
Government (federal, state, and local)
Society at large
Payout Equity Stock price Nonmonetary desires
Business reliability Product reliability Product improvement Product price Product service Continuity Marketing efficiency
Reward of recognition
Reward of pride
Price Stability Continuity Growth
Sound risk Interest payment Repayment of principal
Security and law enforcement Management expertise Democratic government Capitalistic system Implementation of programs
Economic growth and efficiency Education
Employment and training Civil rights
Urban renewal and development Pollution abatement Conservation and recreation Culture and arts Medical care
Corporate Publics and Corporate Strategy survey, this amounts to seeking information from an appropriate sample within each group. A structured questionnaire is preferable for obtaining objective answers. Before surveying the sample, however, it is desirable to conduct in-depth interviews with a few members of each group. The information provided by these interviews is helpful in developing the questionnaire. While overall areas of concern may not vary from one period to another, expectations certainly do. For example, during a recession stockholders may desire a higher payout in dividends than at other times. Besides, in a given period, the public may not articulate expectations in all of its areas of concern. During inflationary periods, for example, customers may emphasize stable prices only, while product improvement and marketing efficiency may figure prominently in times of prosperity.
The expectations of different publics provide the corporation with a focus for working out its objectives and goals. However, a company may not be able to satisfy the expectations of all stakeholders for two reasons: limited resources and conflicting expectations among stakeholders. For example, customers may want low prices and simultaneously ask for product improvements. Likewise, to meet exactly the expectations of the community, the company may be obliged to reduce dividends. Thus, a balance must be struck between the expectations of different stakeholders and the company's ability to honor them.
The corporate response to stakeholders' expectations emerges in the form of its objectives and goals, which in turn determine corporate strategy. While objectives and goals are discussed in detail in Chapter 8, a sample of corporate objectives with reference to customers is given here.
Assume the following customer expectations for a food-processing company:
1. The company should provide wholesome products.
2. The company should clearly state the ingredients of different products in words that are easily comprehensible to an ordinary consumer.
3. The company should make all efforts to keep prices down.
The company, based on these expectations, may set the following goals:
1. Create a new position—vice president, product quality. No new products will be introduced into the market until they are approved for wholesomeness by this vice president. The vice president's decision will be upheld no matter how bright a picture of consumer acceptance of a product is painted by marketing research and marketing planning.
2. Create a panel of nutrient testers to analyze and judge different products for their wholesomeness.
3. Communicate with consumers about the wholesomeness of the company's products, suggesting that they deal directly with the vice president of product quality should there be any questions. (Incidentally, a position similar to vice president of product quality was created at Gillette a few years ago. This executive's decisions overruled the market introduction of products despite numerous other reasons for early introduction.)
1. Create a new position—director, consumer information. The person in this position will decide what information about product ingredients, nutritive value, etc., should be included on each package.
2. Seek feedback every other year from a sample of consumers concerning the effectiveness and clarity of the information provided.
3. Encourage customers, through various forms of promotions, to communicate with the director of consumer information on a toll-free phone line to clarify information that may be unclear.
4. Revise information contents based on numbers 2 and 3.
Keeping Prices Low
1. Communicate with customers on what leads the company to raise different prices (e.g., cost of labor is up, cost of ingredients is up, etc.).
2. Design various ways to reduce price pressure on consumers. For example, develop family packs.
3. Let customers know how much they can save by buying family packs. Assure them that the quality of the product will remain intact for a specified period.
4. Work on new ways to reduce costs. For example, a substitute may be found for a product ingredient whose cost has gone up tremendously.
By using this illustration, the expectations of each group of stakeholders can be translated into specific goals. Some firms, Adolph Coors Company, for example, define their commitment to stakeholders more broadly (see Exhibit 3-3). However, this company is not alone in articulating its concern for stakeholders. A whole corporate culture has sprung up that argues for the essential commonality of labor-management community-shareholder interests.
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