It’s All a Balancing Act

The category I have chosen is the environment because this category has been increasingly influential in managements’ decision-making. Each year, a new environmental report surfaces that details how humans have left a huge carbon footprint on Earth and how we must act now or else face dire consequences. Regardless of one’s political ideology, the environment will continue to be an important issue in society.

Managers must assess their stakeholders’ views on the environment and act accordingly. For a manager working for a business guided by stakeholder theory, he will act in the best interest of his stakeholders. For example, if this manager notices that his stakeholders feel passionately about reducing humans’ impact on the environment, he could allocate charitable donations to an environmentally friendly organization. Conversely, if the business follows shareholder theory, the manager will likely disregard the opinions of his stakeholders, and act to maximize shareholder value. For this example, if the manager notices that his stakeholders feel passionately about the environment, he will not go out of his way protect the environment. While that may seem like an exaggerated example, it is meant to highlight this particular manager’s decision to disregard the wants and desires of his stakeholders.

In the Political Typology Quiz, there were two questions related to the environment. I answered both questions in favor of the environment. My answers, however, are not consistent with the majority of individuals who identify with my political ideology. If I was a manger of a company and I had a stakeholder who wanted me to make a decision that would have a negative impact on the environment, but a positive impact on this particular stakeholder, what would I do?  How might I reconcile these divergent political ideologies? The first step I would take would be to communicate directly with this stakeholder to show her that her opinion matters and is valued by me and my company. I would express to her my company’s values, and stress that we need to act responsibly and in the best interest of the environment. However, if the company’s values did not indicate that the company was in favor of protecting the environment, I would attempt to make environment-friendly practices more noticeable and prominent, so that my company and its decisions benefit the environment. I would act to protect the environment instead of following through with this particular stakeholder’s wishes for two primary reasons. Firstly, I care about the environment, and I feel that the next generation of businesses and managers need to do a better job of protecting the environment. Secondly, if I chose to act against the environment, my company could receive negative backlash from the media and other stakeholders. Balancing political ideologies and stakeholder opinions will not be an easy task, but a successful manager will find a way to ameliorate any situation.


11 responses to “It’s All a Balancing Act

  1. Environmentalism is definitely a hot topic in both management and politics today. In my Managing for Sustainability class, my professor asserted that not only is environmental protection valued by many stakeholders, but also that the environment is a stakeholder in itself. I personally agree with this idea, because whether or not there are human agents speaking and acting on behalf of it, the environment is always going to affect and be affected by anything we do. For that reason, as opposed to certain stakeholders only being relevant to certain organizations, I would say that the environment is a stakeholder for every single organization. What do you think? Do you think framing the environment in this way would change the conversation in either business and/or politics?
    Following that logic, I wonder how organizations in the oil industry, for example, would attempt to incorporate stakeholderism. If the environment is a stakeholder and these companies are in the business of depleting our natural resources while consequently also emitting greenhouse gases, how can they possibly create value for the environment as a stakeholder and still operate? On the political side, do pro-oil lobbyists have an obligation to consider the environmental impacts of what they’re fighting for? Our lobbying system seems myopic in my opinion, as each group is unified behind a single effort. While this encourages definition, clarity, and solidarity within the group, it seems like they fight so hard for one thing that they neglect or refuse to consider alternatives or cooperate with others in order to reach a mutually beneficial solution. Do you think it’s possible for these organizations who are fundamentally grounded on certain values that undermine environmental protection to successfully employ stakeholderism?


    • I never considered the environment as a stakeholder but I agree with you – it is. I think that if businesses treated the environment like they treat other stakeholders, more might be done to protect the environment. In response to your point about companies in the oil industry, I agree that their actions are harming the environment, which we just acknowledged is now a stakeholder. However, these companies are also supplying oil to millions of customers (who are also stakeholders) who need it to fuel their cars and heat their homes. Companies in these predicaments must find a middle-ground. If these oil companies stopped “depleting our natural resources”, how would you fill up your car with gas?


      • It is definitely difficult, and maybe impossible, to reconcile these differing stakeholder interests. I wonder if these oil companies can redefine themselves as “energy suppliers” rather than simply oil companies. Then they can begin to develop alternative forms of energy and actually drive change away from our reliance on these toxic fossil fuels. Of course, that’s easier said than done. It would require incredible practical and ideological overhaul within these companies which would likely be expensive, time-consuming, and just an all-around huge transition. Do you think this could ever be feasible?


      • Well, climate change-induced natural disasters may be one hell of a “Hello Mr. Company,I am your stakeholder too” wake-up call.


    • This is an interesting point. Can corporations whose primary business is tied to often unfavored values (oil/gas, tobacco, etc.) and their managers ever adapt a true stakeholder-oriented strategy? If their own product harms customers or the environment, both significant stakeholder groups, I would think not.


  2. Pingback: It's All a Balancing Act | Gaia Gazette·

  3. In your last paragraph the focus seems to be on how to deal situations where the stated mission of the company (assuming a shareholder perspective) and your own personal convictions don’t align. If you’re unable to convince your shareholders, but you have the ultimate decision making power, which way would you lean? Part of me strongly leans toward doing what’s right for the environment even at the expense of the shareholders. I’m not completely sure if my decision in this case is considered ethical.


  4. I like how you chose the environment as your focus. In the last paragraph you talked about how you would not want to get backlash from people for endangering the environment which is a great point. Nowadays people are trying to protect the environment at all costs and it is something companies have to think about when making decisions.


  5. I also really like how the environment is the focus of your discussion. It is usually an externality that companies can easily gloss over because normally stakeholders are only considered to be people effected by the company. What is not considered is how the people are effected by the environmental effect that a company has. It will be very nice to see a day when consumers will choose products on the basis of environmental friendliness rather than simply price.


  6. I might say that instead of ameliorating nay situation, a good manager will at least leave the various stakeholders with a sense of being engaged. In other words, every stakeholder doesn’t always get what they want, but there is a world of difference between the sense one is being respected versus being tolerated.

    Sometimes, it is not the end that matters, the deal we reach, but the process, especially for those stakeholders with whom you will have multiple interactions.


    • I agree that there is definitely a difference between feeling respected and feeling tolerated. When dealing with a stakeholder with whom you will have multiple interactions with, the best approach will be to respect their views.


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