Ethically serving stakeholders

by The Times 100 on Monday 12th July, 2010

Unlike many organisations, The Co-operative is owned by its members rather than shareholders. The members therefore influence the decisions made within the organisation and will determine the direction the business takes. The values of the members have led to the ethical stance that the organisation takes, and the ethical initiatives that it has implemented. For example, The Co-operative Food Group has reduced salt, saturated fat and sugar in its own brand products; supported the Food Standards Agency's 'traffic light' labelling system; promotes community and sporting activities and has switched many of its products to Fairtrade alternatives. Instead of focusing solely on profit, these decisions have been made with the needs of all the different internal and external stakeholders in mind.

In order to be stakeholder focused The Co-operative Food Group must ensure that it knows what the different stakeholders want. For any organisation, market research will provide valuable answers to the question of what stakeholders need and want. Primary research is usually carried out with representative samples of the population. However, every 10 years the government carries out a census of every household in the UK. The information gleaned from the census about the population is used by the government, local authorities, businesses and other organisations to plan future service provision. The next census is planned for 2011 and will include 56 questions on such things as work, health, education, religion and ethnic background. Although the census has been conducted every decade since 1801 (except during World War II) the 2011 census could be the last. The estimated cost of the census is £482m and the government has concerns that the process is not efficient and the data will become out of data very quickly. It is therefore looking at alternative methods of collecting this data. (BBC News 10th July 2010)

Questions

  1. Define the term stakeholder.
  2. Using the case study, give five examples of ethical behaviour demonstrated by The Co-operative Food Group.
  3. Analyse the importance of market research in meeting stakeholder needs.

Answers

  1. Define the term stakeholder. A stakeholder is a group or individual that affects or is affected by an organisation. Examples include customers, workers, suppliers, government, local communities and shareholders.
  2. Using the case study, give five examples of ethical behaviour demonstrated by The Co-operative Food Group. Examples may include: • Traffic light food labelling • Reducing salt, saturated fat and sugar in own brand products • Introduction of a welfare quality standard for indoor-reared chicken from UK farms • Using sustainable sources of fish • Supporting community and sporting activities • Supporting school visits to its farms to help children understand where their food comes from • Sourcing the majority of its power from renewable resources • Having its own recycling centre • Reducing the amount of packaging it uses by 15% • Only selling free range and organic eggs • Selling more Fairtrade products.
  3. Analyse the importance of market research in meeting stakeholder needs. • Market research forms the basis of a market led approach to business • Stakeholders have different needs so research is needed to find out how these differ and how stakeholder conflict can be resolved • Research can identify areas where stakeholder needs are not currently being met, providing opportunities for the business • Research can identify where further research and development is required or where savings can be made.

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