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Corporation Abuse of Power Against Stakeholders

Paper Type: Free Essay Subject: Business
Wordcount: 1918 words Published: 23rd Sep 2019

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Topic: It could be said that “large corporations abuse their power against stakeholders e.g. customers, employees, suppliers, public, communities”. Do you agree or disagree? Explain what your answer is and discuss what has contributed to your decision and how you have reached your conclusion. You are to include a clear and rational argument for your case that has strong academic theory to support your thinking and examples to back it up.


Stakeholders alludes to those people or a gathering who has personal stake in the result or the consequences of the body of a work in an association. (Johnson, Scholes, and Whittington, 2008) characterized Stakeholders as the ” people or small groups who depend on the organisation to fulfil their own goals and on whom, in turn, the organisation depends”. They might be effectively engaged with the task and may have an enthusiasm on the aggregate execution or fruition of the undertaking. They have the ability to apply positive or negative impact over the task, its expectations and its group members (Bourne, 2009). Henceforth Stakeholders can be called as the key individuals engaged with an undertaking. They have an enthusiasm for the execution of the task, getting the endorsements and assets, and they additionally have a stake in the venture result. In spite of the fact that they might not have an official job on the venture, these are the general population who will at last gauge the achievement or failure of a task (Koning, 2009).

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So, this Essay aims to explain that stakeholders are abused by large corporations in 21st century by supporting with different illustration. The opinion of the majority of businesses’ is that employees, customers, shareholders and suppliers are key organizational stakeholders. While obligations to these stakeholders are sometimes regarded as motivated by organizational self-interest, the ethical perspective asserts the correctness or wrongness of certain firm actions regardless of social or stakeholder obligations. Customers are key stakeholders that help establish the firm’s reputation and identification. Procter and Gamble, for example, is today considered a world powerhouse driven by the textbook market with billions of dollars of brands like Bounty, Olay, Tide, Crest and Folgers. Understanding customer needs and wants and providing customers with high-quality products are the key to the company’s success. (Academy of Management Executive. 2004. Vol. 18. No. 2 )

Role of Stakeholder in Large Corporations

A company stakeholder is responsible for the company’s results (positive or negative). A stakeholder may also have invested in the company, which also causes it to be interested in the success or failure of the company. Stakeholders have different roles within a company, and this depends on the rules, titles and responsibilities that are laid down either when the company was first established or when the company grows.

Stakeholders may be responsible for voting on major changes in the company. Stakeholders such as the Board of trustees can elect management to take all the important decisions on their own. Stakeholders can even hold important executive positions where they can report directly to the Chief Financial Officer, CEO or president. The manager may be a stakeholder in certain departments because his decisions can lead to the success or failure of the performance of that department, and the management may be responsible for hiring staff in that department. Stakeholders are generally responsible for maintaining or achieving investment returns. Sometimes you can make the investment on a consistent basis over time. For instance, the consistent investment of one company in stocks is an example of a stakeholder who continually increases its stake in the company. Stakeholders must constantly ensure that their business decisions do little to damage society and the environment. You can choose to use an alternative resource if you realize that existing resources are scarce. Stakeholders can donate money to a nation in need or they can choose to limit their resource depletion or the exploitation of workers at a certain area (such as a third world country). They constantly monitor the decisions taken by the company to ensure that the public interest always takes precedence over profit.

 Relations between Stakeholders and large corporations

Unlike shareholders interested in return dividends and share price growth, stakeholders have a wide range of interests in the operation of companies. Freeman (1984) stated that ” any group or individual that can influence or is affected by the achievement of the objectives of the organization ” is a stakeholder. The main goal for companies is to maximize profit and growth but now a day’s companies are more focused on maximization of profit, which is why I agree to some extent that large companies abuse their power against stakeholders.

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Customers ” provide the company with a livelihood in the form of revenue ” (Freeman, 1984). Companies rely on customers because they indirectly finance the development and growth of companies. Customers, however, want value for money and’ cheap’ prices. Many companies take advantage of customers and thus gain supernormal / abnormal profits. For instance, Nike is one of the world’s top sports clothing brands, but for years Nike have been dogged by allegations of sweatshops and child labour. Workers in the Sukabumi plant, approximately 60 miles from Jakarta, say that supervisors often throw shoes at them, slap them in the face, kick them and call them dogs and swine. Nike workers ‘kicked, slapped and verbally abused’ at factories making Converse (Daily Mail, 2011).

Even the Apple a well know world’s best smartphone manufacturer seems to be exploiting the workers. Workers were asked to stand for 12-hour shifts with only two breaks of 30 minutes, six days a week, claimed by China Labour Watch, a non-profit organization. Staff allegedly worked for an average of 69 hours a week without adequate protective equipment at risk from chemicals, noise and lasers. Apple had a limit of 60 hours of work per week (Garside and Arthur, 2013). Not only the Apple but even Samsung seems to be exploiting its worker in the china. Samsung Electronics, the world’s largest mobile and smartphone manufacturer, is accused of exploiting younger workers and using factories in China, where some employees have been physically and verbally abused, and forced to work over 100 hours of overtime per month (The Guardian, 2012). Not only the employees but suppliers of large supermarkets like Tesco and Sainsbury are being exploited by bullying and putting small suppliers at risk. For example, “Britain’s powerful supermarkets have been accused of bullying farmers and food producers in order to keep costs low” (Hall, 2007) and Reckitt boss slams Tesco for endangering small suppliers in UK (Leyland, 2008). Therefore, from the above examples it is evident that workers and suppliers of different large firms and factories are being exploited and are ill-treated, which should avoid as stakeholders are vital for the growth and progress of large corporations.


In conclusion, it can be seen by the above examples that large corporations abuse their power against stakeholders like customers, employees, suppliers etc. The main reason behind the exploitation of the stakeholders is the profit maximization of firm due to which firm forgets about the fact that company and its stakeholders should go hand in hand for the sustaining. This essay has demonstrated that Understanding Stakeholders needs and wants and providing them whatever company can give are the key to the company’s success (Academy of Management Executive. 2004. Vol. 18. No. 2). But stakeholders’ benefits are not taken into consideration like Apple and Samsung who exploit’s their workers (Garside and Arthur, 2013) and large supermarkets like Tesco and Sainsbury abuses their suppliers (Hall, 2007). So, the large corporations need to take care of their stakeholders as they are the part of business and any harm to them can be affected on business. The evidence in this essay has led me to agree that large businesses abuse their power over stakeholders.



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