BUSINESS ENVIRONMENT AND ETHICS 4
CaseStudy: Stakeholders’ Analysis
CaseStudy: Stakeholders’ Analysis
Theconcept of stakeholders originated many decades ago in the business’literature, and it has become a vital tool in examining the roles andinterests of various parties involved in the operations of business.The stakeholders’ analysis, in this case, is intended to evaluateand understand the relevance of each stakeholder in the business.Different techniques for analysing interests, relevance, influence,positions and the interrelation for particular stakeholders will beused for the analysis in this case. For instance, in the caseconcerning data mining, the primary stakeholders that can beidentified include customers, society, management, and thegovernment. Stakeholders refer to all parties either within anorganization or outside that may have an interest or influence on theoperations of a business. Even though external stakeholders may nothave great influence in the organizational activities, they highlycontribute to the decision-making of the firm. Before making anydecision on the organization, the management must consider theinterest of all stakeholders. Where the interest of the stakeholdersis contradicting, an agency problem arises and hence loworganizational efficiency.
Factsand ethical issues in the case
Datamining it trying to investigate and analyse customer information ofthis organization that is trying to target the pregnant women’smarket. The company is trying the means of increasing theirprofitability through increased revenue and reducing their costs. TheTarget team is using the statistical methods to extract informationabout the consumers and even in predicting the purchasing pattern.For example, Target uses the data mining to assess when a woman isgoing to have a baby before she purchases diapers.
Withtheir marketing strategy, Target has failed to control the potentialcustomers to whom they are sending ads to, which is through mail.This was evidenced when the marketing team was found to have beensending coupon mails to a lady who was still at high school. Theaction made the father’s lady to be angry, and therefore, he had tocall the manager and ask if they are encouraging his daughter to getpregnant. The manager had a hard time to explain to the father andalso apologizing to him. Even though it was the role of the firm toadvertise its products and service to its current and potentialcustomers, the marketing team had failed in their customer targeting.Sending emails on the coupons to a high school student was first ofall unethical as it compromises with the values and norms of thesociety.
Inthis issues, the most concerned stakeholders included the customers,manager, and the society. Without customers, a business cannot exist.For an organization to be more successful, it must give priority toits customers. Consumers do not only buy a product but what theypurchase is the value attached to the product and service that theyare buying. The manufacturers must ensure customer satisfactions forthem to be able to acquire and maintain a large market share. Productquality, pricing and usage safety are some of the values thatconsumers use to evaluate a product or service. It is also advisablefor the organization to undertake a thorough market research toidentify the customers’ needs and wants and come up withappropriate strategies to satisfy those needs. The role of thestakeholders is very important to every success in the organization.
Onthe other hand, if sending such ads to the high school student werefound to be illegal, the firm could be at a risk of facing legalaction from the government. The U.S government has set provisionsthat require businesses to be responsible and avoid exposing explicitand suggestive material to children. If the lady’s father took thecompany to the court, the firm could have faced legal charges.However, the manager also played his role by negotiating andapologizing to the father.
Fromthis case, it is highly recommended that every organization shouldconsider the interest of every stakeholder when making a crucialdecision for the firm. Target had failed to accurately identify theirpotential customer and the firm ended up in unethical practices. Thelady’s father, in this case, is representing the society. The roleof society is integral to the firms and therefore, creating a highinfluence on the decision-making process. Sending ads that areintended for pregnant women, and to a high school student wascontrary to cultural believes, values and norms. The marketing teamin the Target Company should devise a strongly monitored system thatwill allow the interested potential and current customers to make asubscription. The firm should then send the ads to the subscribingconsumers for efficient communication. Doing so will not only helpthem in minimizing confrontations with their customers, but alsomarketing cost reduction. Allowing the customers to subscribe willensure that the firm is sending the information and productdescriptions to the right persons only.