Social Performance Part 2

The company I chose is Third Federal Bank. Third Federal Bank is a medium size public
corporation specializing in the banking needs for a wide range of customers. The company
provides services that fit the needs of all business groups. Third Federal Bank has approximately
2,000 employees and has annual revenue of $330 million with share price at $24.50 per
share. The company is committed becoming the market leader providing the best innovative
banking products and services while offering quality service to its customers. Third Federal
bank is dedicated to doing its part in being a good corporate citizen and has established its goal
to set up a foundation that directly funds health-related needs for individual children when
insurance and other financial resources have been exhausted.
The primary stakeholders of this company includes the stockholders, creditors, customers,
suppliers and employees, they provide a unique transaction or two way exchange. The
relationship between the company and the stockholders is that the stockholder invests in the firm
and the firm pays a satisfactory return on investments and realizes an appreciation in stock
overtime. The role of the stockholder is to exercise voting rights based on share ownership and
to exercise their rights to inspect the company books and records, they have the power to have a
negative or positive influence on the company, it is in their best interest to help the company
achieve its goals since in the success of the company benefits them as well (Lawrence and
Weber, 2011).
The relationship between the company and the creditors is that the creditors lend money to the
company for working capital and collect payments of interest and principal from the
company. The role of the creditors is to assist the company financially to achieve its
goals. The companys creditors can have a negative influence on the company if it were to call
in loans if payments are not made as arranged and utilized their legal authority to repossess or
take over property in a severe delinquency situation (Lawrence and Weber, 2011).
The relationship between the company and its suppliers is that they provide the supplies for
example the service, energy, equipment, stationery and other supplies that are necessary for
conducting business, the company makes orders to the suppliers who demands are paid promptly
for their services. The suppliers can play a negative role in the success of the company if the
suppliers would refuse to meet orders if conditions of contract are unsatisfactory and deciding to
supply to competitors instead of the company leaving the company unable to meet the needs of
its customers (Lawrence and Weber, 2011).
The relationship between the company and its customers is very important, the company
provides customers with a fair exchange of value and quality from money spent and receives
reliable products from this exchange. The role of the customer is to be willing to buy the
companys goods and services, if customers purchase goods from the competitors or were to
boycott the companys products this would have a negative impact for the business (Lawrence
and Weber, 2011).
The employees have a very important relationship to the organization has employees contribute
their skills and knowledge in exchange for wages, benefits and professional development while
the company helps them to maintain a stable employment and rewards them with a fair pay for
their work. Employees play a positive role in servicing the customers on behalf of the company;
employees may have a negative impact on the company by taking work actions or strikes in
protest of the company decisions. Employees as a group have union bargaining power and
possess information about the companys personnel, products and services that they could bring
to the public attention that could have negative impact on the company.
The secondary stakeholders on the other hand, although they do not engage in direct economic
exchange with the firm are nonetheless affected by or can affect the companys actions. This
group includes the communities, nongovernmental organizations, the media, business support
groups, governments and the general public. The community may play a role of working
together with the company to achieve both the goals of the company and the community or my
work against the company by blocking its plans through lobbying for government regulations, or
restricting licenses and permits (Lawrence and Weber, 2011).
The non-governmental organizations include those dedicated to environmental interest; their
relationship to the company is that they monitor the company actions and policies to ensure that
they conform to both legal and ethical standards with public safety as a top priority. The role of
these nongovernmental organizations involves getting a broad public support on issues and
lobbying government for regulations in protection of the public and against the company if it
believes the public to be at risk (Lawrence and Weber, 2011).
The relationship between the media and the company is important because the media has the
ability to assist in creating a positive or negative image of the company. The media can play a
role in publicizing events that affect the public negatively or positively (Lawrence and Weber,
2011).
Business support groups are important to the company in establishing good relationships so that
the company may benefit from research information that can help the company to be more
effective in a changing environment. The business support groups can assist in providing legal
and political support to the company beyond its normal capabilities (Lawrence and Weber,
2011).
Although the company pays taxes and fees to the government it is not directly involved in the
economic transactions of the company hence the classification is as a secondary stakeholder.
Government plays the role of adopting laws and regulations, issuing licenses and permits with
the power to allow or disallow activities within the industry that would affect the company
(Lawrence and Weber, 2011).
The general public represents another secondary stakeholder which is a part of the environment
in which the company operates. The role the general public plays is to press government for
action on matters that concerns the general public and seeks to condemn or praise a company
through support by activists (Lawrence and Weber, 2011).
The stockholder has a very powerful position as a primary stakeholder in the company and can
use its power as an owner of the company to offer suggestions to the direction the company
should take on matters that support the stockholders interest. They expect the company to
produce as much value as possible for its owners and investors by paying higher dividends
regularly and by running the company in a way to increase the stock value. Stockholders have
an opportunity to vote on major decisions such as mergers and acquisition, the composition of
board of director and issues that arise before the annual meeting. The stockholders can exercise
their voting power in getting the company to operate in the way they feel would best achieve
their interest.
The customers, suppliers, creditors and the employees as primary stakeholders in the company
can influence the direction of the company by exercising economic power over the
company. Since the main interest of customers to get a fair value and quality in exchange for
the purchase price of goods and services then the company must listen to what their customers
needs and make an effort to supply these needs.
The suppliers wish to receive compensation for the products and services they provide. The
suppliers can influence the direction of the company by providing the products and services that
the company requires in a timely manner or they could hold supplies or refuse to fill orders if
they feel that the company refuses to honor its contractual responsibilities.
The creditors have the ability to provide the financial support the company needs, like long-term
financing and to structure loan facilities in keeping with the companys cash flow needs in order
to help the company achieve its financial goals. Creditors can influence the direction of the
company by making funds available at reasonable interest rate or by calling in loans when
payments are not made rather than working with the company to structure payments in keeping
with cash flow. The creditor can exercise economic power over the company that can have an
adverse effect on the economic side of the business (Wilson, 2011).
Employees can also use economic power over the company by refusing to work under certain
conditions a form of economic power known as strike or slowdown, and operating in an
organized group such as a union. Employees can chose to make a positive contribution to the
success of the company by offering their skills and knowledge in exchange for wages, benefits to
assist in the growth and professional development of themselves and the company (Wilson,
2011).
The government, although a secondary stakeholder, can use its political power, through
legislation or lawsuits to influence the direction of the company. The community activist and
nongovernmental organizations may exercise political power by organizing themselves in protest
if they believe that the company is not employing members of the community or if they think the
company poses a threat to the environment. In the event that the community feels that the
company is not doing its part in the development of the local area, then if could use its influence
to get the government to use laws and regulations against the company (Wilson, 2011).
According to US Department of Housing and Urban Development (n.d.) a coalition is an alliance
of individuals and organizations, sometimes referred to as an organization of organizations,
that come together to address a specific problem or issue and reach a common goal(s). Goals that
focus on system-wide changes and collaborations and require a variety of expertise are
particularly well suited for coalitions. This project will benefit the different stakeholders of the
company and is a project that can involve all the stakeholders of the company.
The success of a coalition depends on achieving goals and objective that its individual
stakeholder organizations would benefit from but would not be able to achieve on their
own. When businesses invest time, money and effort in citizenship activities they often reap
rewards in the form of enhanced reputation and legitimacy. To encourage the stockholders to
participate in the formation of the coalition would be to show them how by the company being
involved in this venture would be a way to proactively build stakeholders partnership, provide an
opportunity to discover business opportunities and turning vision into financial performance
(Lawrence and Weber, 2011).
The government has strong political power and through partnership with the company can
strengthen its political position within the community. Government does have a responsibility
to serve the needs of its citizens. Government by itself cannot address all the financial needs of
individual regarding healthcare and through the establishment of partnership with the company
would be able to assist in the alleviation of some of these problems.
In some cases, it is possible that competition may develop between groups. Coalition
stakeholders may feel that the cost of participation is greater than the benefits it provides. If a
coalition demands significant amount of time from stakeholders and does not seem to provide
comparable benefits, a coalition will quickly begin to lose its stakeholders.









References


Lawrence, A. T., & Weber, J. (2011). Business & society: Stakeholders, ethics, public policy
(13th Ed.). New York, NY: McGraw-Hill Irwin.
US Department of Housing and Urban Development. (n.d.). Building Effective Coalitions.
http://www.hudhre.info/documents/BuildingEffectiveCoalitions.pdf