Introduction to Business Context
Today, most of the business works in a global context. By term Business context, we mean, all the circumstances that set an event, idea, or statement in the terms that are fully understandable by the organizations. Organizations today are getting more and more competitive. This more competitive environment requires a sustainable and a responsible supply chain in the market. It is a fact that organizations and those who are involved in the responsible of managing the environment is the main subject for environmental uncertainty (Needle, 2004).
Organizations today operate a very complex environment. It is very important to bring study all the factors to bring together all market competitive goods and services. These may include legal or political frameworks, economic issues affecting demand and supply of goods and globalization (Glyndwr, n.d) Assignment help.
For all these factors, there is a need of business context model, which expresses the current business problems. One of the strongest elements of organization is stakeholders. The involvement of stakeholder in every well established organization is very important (Maxted, 2008).
In this report all the basic key ideas of stakeholder theory will be evaluated. Identification of the fact that stakeholders have attained a key position in every business sector is a very important task. The aim of this report is to point all the major characteristics of different stakeholder theory which highlights the involvement of stakeholders in housing sector. Expectations of the business community are increasing into areas beyond the core product or service into consideration of the environment, standards and human rights (Wetherly and Otter, 2008). The weight of expectation may lead to potential conflict amongst stakeholder groups, particularly in times of economic austerity currently being experienced in many European Countries.
The construction industry is widely-recognised as an accurate barometer of the business environment and reports in late summer 2012 were of profit falls by over 20% and a continuation of the decline in house sales. To address this number of changes to UK planning procedures have been announced by the government in September 2012.
Stakeholders Theory : In literatures numerous views has been details by various authors. In general, stakeholder theory can be defines as a conceptual framework of ethics followed in business and organizations. It addresses the morals and ethical values followed by the management for the organizations (Mitchell, 2010). The first stakeholder theory was proposed in a book named “Strategic management.” Stakeholder theory highlights how management satisfies the interest of the stakeholders in an organization.
According to Donaldson and Preston, four theses are related to stakeholder theory:
- Stakeholder theory is a descriptive theory, as it offers the whole model of business.
- Stakeholder theory is instrumental as it offers a framework investigates the link between the stakeholder management and the performance of the organization.
- More than being descriptive and instrumental, this theory is more of normative in nature as it identifies the interest of all the stakeholders and considers those interests intrinsically valuable.
- Stakeholder theory evaluates the attitude, practices, and structure gives a simultaneous attention to the interest of all the stakeholders (Furneaux, 2006).
An Investigation on the Stakeholders of Construction Projects in Dubai and Adjacent Regions: Based on Stakeholder Theory
In Dubai, stakeholder theory helps managers to prioritize the interests of every individuals and groups, being affected by the organization’s activities. The theory also unfolds current circumstances faced by the stakeholders and it urges a managerial aspect by which the stakeholders can be identified despite of their fluctuating contribution in business activities (Malkat, and Byung, 2012).
In Dubai A survey was held under which ha questionnaire was designed based on various literature reviews. This survey was forwarded to all the potential players involved in the Dubai construction industry.
The result of the survey showed that 29.9% of the players were consultants and 23.4% of the total was working as client. Projects which were under construction counted for 55.8%. 87% of players were working on building projects. The direct influence of the project was stakeholders and was described in the survey as Primary. However, the stakeholders with indirect influence on the project were described as Secondary players. These were trade pressure groups and associations with 84.4% and 92.2% and of the total respondents.
As per the survey, 13 stakeholders were ranked based 6 project spheres. The six spheres were; decision making, time, cost, quality, safety, and environment. The rating scale included five parameters of raqnking; 1=extremely weak, 2=Weak, 3=Neutral, 4=Strong and 5=extremely strong. As per the ranking, PMs ranked first, on the second position were clients and consultants stood at the third position.
Carroll’s model : In year, 1991, a model known as Carroll model was proposed by Carroll. According to this model, corporate social responsibilities involve profitable, economical, ethical, and social conduct of business. Carroll model is like a pyramid and suggest that all the four components are not mutually exclusive, but these components helps managers to identify all the different type of obligation are in constant with one another (Katsoulakos, 2006).
In the below figure, a detailed explanation of Carroll Model is illustrated. It can be seen that Carroll surged that all the business must have economical responsibilities; however without making profit, the companies will cease and CSR will die. A CSR model is not against profit, it simply illustrates how profits are made.
In the next section come legal responsibilities. Carroll has explained the importance of legal responsibilities; however, he had not considered the countries in which law is ignored or has been modified. Ethical responsibilities come next in the pyramid. It says that may it be any business, following some ethical values is very important. By ethical values we mean the values that distinguish between what is right and what is wrong (Collinge, 2012).
Business, when viewed as a stakeholder in society, has responsibilities that extend beyond the economic and legal framework to incorporate ethical, environmental and philanthropic aspects.
Economical, Legal, Social, and Philanthropic Responsibilities by Balfour Beatty.
According to a survey done in year 2012, Balfour Beatty is world’s one of the top infrastructure service provider operating at a leading position in all the major market. The company in over 80 countries, in diverse economies and market provides assets to develop, function, and thrive. Engaging with stakeholders proactively is one of the essential parts followed in this company (Balfour Beatty, 2013).
- Economic Responsibilities by Balfour Beauty: With an active involvement of all the stakeholders of the company, in last few years the company has witness a great and a remarkable growth. The stakeholder panel at this company provides with an independent perspective on the overall approach to sustain well in all the major market. The Company now desire to expand business in some economically buoyant countries such as South Africa, India and Brazil. In last few months, the company has taken steps to establish a strong hold on both Brazil and India and still planning is going in order to have a strong hold in South Africa. It is now ranked as 19th in the international league table of contractors. This group is now the largest fixed rail infrastructure contracting group across the world, it provides a great support services to all its customers as well as the employees. It firmly believes in providing support to electrical and mechanical engineering and other disciplines in as well as outside the company. Its excellent financial performance had made it possible to face the future with great confidence.|
- Legal Responsibilities by Balfour Beauty: Following all the laws and living inside all the legal boundaries is firmly believed by this company. The long-term success has been witness by fulfilling the responsibilities of all our stakeholders; customers, shareholders, employees, and the communities. Over half of the companies work is undertaken for government. The company believes in working within the legal and regulatory boundaries and urges to involve governments and regulators so that they can understand the issues that might impact the business and hence affect the customers and the communities in which the business operates (Belfour Beatty Sustainability, 2011).
- Ethical Responsibilities by Balfour Beauty: With a key involvement of its entire stakeholder, the company considers that ethics, values a major instrument for business success. Integrity is a like a pillar of the company and one of the top corporate value. Today, this company is in a position that it can clearly distinguish between what is right and what is wrong. The dedicated ethical program of the company is designed in such a manner that it to imparts ethics and integrity all across the business. We hope and believe that our determination to conduct business. To a great extent the company has succeeded in eradicating corruption and brings best infrastructure practice and services in the emerging countries. It has built a great confidence and trust among its entire clients and other stakeholders (Belfour Beatty Sustainability, 2011).
- Philanthropic Responsibilities by Balfour Beauty: Balfour Beatty consists of about 50,000 people working in the field of designing, maintaining and building infrastructure for communities. People and communities are at the heart of this company. The safety of our people with whom it comes in contact with is a key priority for the company. Balfour aims to last a very positive impact on the communities in which it operates. Involvement of local communities, protect and strengthen the communities. The company also wants to impart better projects that will help to secure future work of the communities. The company has developed a number of national level initiatives which reflect our commitment to and which improvise the life and living standard of young people (Balfour Beatty, 2009).
Theory of Supply and Demand: Related to the Housing sector in UK
The housing sector in the UK particularly includes privately owned house and apartments, privately and locally rented accommodation, and some property managed by housing associations. In this section, we’ll evaluate the demand and supply of private housing in UK sector.
Demand for Private Housing : The demand for private housing in UK is evaluated by a number of factors. One of the most influencing factors in this regard is price. Always, there is an inverse relationship between the prices for houses and its demand. At higher prices the real incomes reduces and subsequently individuals reduce their demand. At higher prices, renting appears more attractive to individuals. When house prices are lower the reverse attributes prevail; however, the demand for property is very speculative. A rise in prices leads to a rise in demand (Durden, 2010).
Non Price Determinants:
- Interest rates: Higher interest rates had made housing property less affordable, and hence the demand curve has shifted to the left.
- Population: Higher Population increases the demand for housing property in a country. The more is the population the more is the demand.
- Incomes of households: An increase in the income level of an individual will increase the demand for housing property in the county. With more income an individual is able to spend more, and hence his demand also increases.
- Price of substitutes: An alternative to ownership is renting property. As the renal prices will increase, the demand for price ownership will automatically increase.
Supply of Private Housing:
The supply of private housing is directly related to house prices, and hence the supply curve slops upward. Supply is frequently inelastic because of the frequent changes keeps on taking place. Change in house prices will cause a movement in the existing supply curve of property (Durden, 2010).
Non Price Determinants:
- Availability of factors: An increase in the availability of land shifts the supply curve towards the right. Also, as access avaliblily of labor will increase the supply of private ownership.
- Costs: In the case of new-builds the costs involved may have a significant effect on the supply. These costs include raw materials and labor costs. A shortage of labor causes the supply curve to shift towards the left.
- Government legislation: The strict government levitations for new house building deter house builders to a great extent. Government may also tighten restrictions on building in rural areas. This reform may decrease the supply of private housing to a great extent
- Technology: The ever changing technology for privates hosing in UK has increase the elasticity of supply of properties at much the cheaper rates in the market.
Price elasticity of demand in UK Housing Sector:
Price elasticity of demand in UK housing sector measures the responsiveness of demand of private ownership to the change in its price. When there is a necessity and there are few substitutes available, the demand becomes inelastic. This may well force up the eventual market
price when a transaction is agreed. The price elasticity of demand private ownership depends on the availability of substitutes. According to some surveys the income elasticity of demand in the UK is very positive. This means that when the real income rises, the market demand for housing also rises.
Price elasticity of Supply in UK Housing Sector:
Price elasticity of supply in UK housing sector measures the responsiveness of demand of private ownership to the change in its price. When there is a necessity and there are few substitutes available, the supply becomes elastic. This may well force up the eventual market
price when a transaction is agreed. It is necessary for a firm to know how fast and effectively it can respond to price changes taking place in the market conditions. Higher prices will lead to more supply.
Suggested: Business-ethics in action
By this Report we can conclude, that the housing and the construction industry in today’s competitive era is growing at a very fast speed. We can see that in last few years many major players have entered in the housing sector has witnessed a high growth. The major role in this rear is pale by the stakeholders. The companies firmly believe that the involving of stakeholder in the various business activities is very important. By the help of stakeholder theory, the managers in this field to a great extent are able to identify the key interest of all its stakeholders. Also, if see, the companies are using all the economical, legal, ethical, and Philanthropic factors, that at the helps in shaping the communities as well as the whole construction industry. At last, the demand and supply for all the private house ownership in UK is increasing at a very fast speed. This at the end will end to economic development of the country.
- Needle, D., 2004. Business in Context: An Introduction to Business and Its Environment. 4th ed. Cengage Learning EMEA.
- Wetherly, P. and Otter, D., 2008. The Business Environment: Themes and Issues. 2nd ed. Oxford University Press