Creation of Value should focus more on Business Stakeholders than on Financial Capital – Opinion Editorial

Business organizations have for a long time given much importance to financial capital such that profit was more valued in business than anything else. This has made many business enterprises without paying more attention to the harm they may cause to the surrounding environment, people surrounding the business or using the produced products, or people working in the enterprise. Although the concept of value creation has been in place for about two decades, many business organizations have not considered embracing it due to misconception. Value creation has been critically claimed to result to closure of plants, layoff, environmental protection disregard, drastic cost reduction, and disregard of human dignity and law. However, this is not true. These are just excuses that have been used to counter the process of value creation. Actually the opposite is true. Actually the analysis of the groups which have frequently created sustainable stakeholders value over a lengthy period demonstrates that these same organization are leading in training and hiring workers, meeting new needs, creating new markets constantly, innovation, and inspiring strong customer loyalty and relationship (Westermann-Behaylo et al., 2016, p.545).

Read also Opinion Editorial – Dignity of Human and Realization of Common Good

Value creation is very important in any organization, not just due to the financial benefits it brings but also due to the value it creates to the produced products, to the workers, and customers in general. An organization should focus more not on making profit but on enhancing the working environment, and creating desirable products that effectively cater for the needs of the anticipated customers. Organization should also consider adhering to the laws that protect the environment from various forms of industrial pollution, in its operation (Audi, 2012, p. 275). Working with anticipation of pleasing customers and catering for the workers gives the company a greater chance of enhancing its profitability. Catering for working environments makes it easy for workers to fulfill their work related requirements. It eventually results to increase in workers motivation, dedication, and general enhancement of their performance. Creation of valuable products attracts more customers into the purchase of the said products.

Catering for the environment and giving back to the society promotes the company working environment and its effective coexistence with the locals. It also works to promote the company legacy, especially among those who love environment. This generally results to increase in the organization preference by workers, preference of the company’s product by the customers and attraction of customers who love green products. Customers always find it easier to pay more for a product with increased value, guaranteeing the company of a higher level of profit. All this eventually results to increased company’s financial value. This illustrates that creation of stakeholders value which assist in enhancing human dignity creates a situation that guarantees increase in the organization financial value. The outcome is much more sustainable compared to an organization that focuses more on financial value creation.

Business organization should operate with intention of solving identifiable social problems. This means they should produce quality products which should effectively assist in addressing the said problem, without creating a new one. This is why organizations should focus more on employing effective production methods that care the environmental laws, especially green production. They should also employ effective human resource management techniques that protect the health and the rights of workers rather than subjecting them into any form of danger. Such organizations should play a great role in enhancing workers safety and health. They should also provide standard compensation that will enable their workers to manage their basic needs and to do other important duties in life. Creation of stakeholders’ value does not only enhance organization financial performance but it also assist in protecting the life of the consumers, workers and the surrounding communities. It can therefore be said that value creation works to preserve human dignity and to enhance goodness for all. Focusing on profit making is important for any organization. However, the organization need to consider the means employed to enhance profit making. These means should not focus more on profit making forgetting the human dignity. They should consider employing means that will promote the general goodness of all involved stakeholders, while enhancing profit making. This can easily be attained by considering the aspect of stakeholders’ value creating in production (Westermann-Behaylo, Buren& Berman, 2016, p.534).

Get Your Custom Paper From Professional Writers. 100% Plagiarism Free, No AI Generated Content and Good Grade Guarantee. We Have Experts In All Subjects.

Place Your Order Now
Scroll to Top