In your opinion, which of the following best characterizes the purpose of the firm? Explain your answer and describe possible implications to the other stakeholders.
For example, if you believe the purpose of the firm is to “maximize shareholder value”, what would be the implications to customers or employers? If you believe the purpose of the firm is to “create value for a broad set of stakeholders”, what would be the implications to shareholders, customers, or employees?
- Maximizing shareholder value
- Bringing value to customers
- Creating value for employees
- Creating value for a broad set of stakeholders, including society and the environment
Home Depot-Creating Value for Broad Stakeholders
Home Depot is a prominent American company. This company deals with home improvement suppliers and many other home appliances. Interestingly, the firm is looking to create value for different key stakeholders, including employees and customers. However, some implications are in the limelight. These implications can create an impact in strategic planning as well.
The major implication for customers is the quality and design. Customers, being major stakeholders of the company, are looking to pay for high quality. Thus, customers can give value to products. Quality increases the assertiveness of customers in the buying process. The company wants to satisfy customers through high quality, and it seems the major implication (Gregory, 2017).
On the other hand, employees are always key stakeholders of the company. Value can be created in many ways. However, the value is to be created by creating a work-friendly environment. In this company, the management usually gives equal opportunities to employees to grow and contribute to success in an effective manner. In a diverse workplace, employees can be motivated by these equal opportunities. Thus, these are some key implications when creating the value for stakeholders.
Creating the value for the shareholder is important for the Home Depot Company. It is to be ensured that all shareholders can have a reasonable return on their investment. The most important thing for the company is to increase or maximize the shareholder’s expected value. The firm may integrate with several ways to maximize the return. For Instance, Home Depot may enhance the visibility of a merger or acquisition to increase the expected value. Further, a change in strategic decisions is also a good move to make a big difference (Gregory, 2017).
These implications when creating the value for stakeholders are visible. To gain and sustain success in the competitive market, these are some thoughtful considerations.
References
Gregory, L. (2017, February 3). Home Depot’s Stakeholders: A CSR Analysis. Retrieved from http://panmore.com/home-depot-stakeholders-csr-analysis.
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