Introduction
The report helps in analyzing the different issues or the wicked problems that is faced by Lao-Savannakhet Cement Plant Co. Ltd. A proper critical analysis is required to be done on the selected wicked problem that is faced by the respective company. The wicked problems that have been identified are the company has lack of clinker and the competitive pricing, as there is increasing competition in the entire cement factory. These wicked problems have huge influence on the diverse and distinct interests of the stakeholders and it has resulted into conflicts (Mansell, 2015).
The wicked problem that has been identified in the respective company Lao-Savannakhet Cement Plant Co. Ltd is related to the competitive pricing and the huge level of competition in the entire competitive cement market. This is one of the wicked problems faced by the company and this can cause huge loss to the company in the future as well. Lao-Savannakhet Cement Plant Co. Ltd is a cement company that is located in Vilabouly District of Savannakhet Province and is performing well in their functions. However, the problem of the huge competition has created different issues among the different stakeholders of the respective company (Johnson & Schaltegger, 2016).
The respective company is the cement factory and there are different competitors in the market as well. As there is huge competition in the competitive cement industry, the different shareholders are concerned about the profit and the customers in the market require cement that is lower priced. This is one of the major concerns of the respective cement company Lao-Savannakhet Cement Plant Co. Ltd in such a way that they will lose the valuable customers and stakeholders in the competitive market. The company is not able to perform well recently in the market as the prices of the cement have increased.
There can be different alternatives to solve this problem, however there can be issues relating to this as well. It can be seen that if the production costs are to be reduced then the workers will be calling off strike and this will be another major issue for the company as well. The major problem that has been addressed in the particular case is related to the competitive pricing of the other competitors in the market. For the cement factory, it is a huge issue as the cement industry is growing at a huge pace and this can have huge impact on the business. When the competitiveness will increase, this will increase the glut situation of the respective company and this will affect the reputation of the company in a huge manner.
The exponential growth of the company will be reduced largely and this will affect the reputation and growth of the company. The company can apply different kind of models and theories in such a manner that will help them in increasing their market share and solve the problems in an effectual manner. The different models can be used in order to improve the situation faced by the respective company and increase their growth in a short span. The company can use the soft system approach, as this will help in identifying the different issues and solve them with implementation of different models.
According to Gupta and Çakany?ld?r?m (2016), the different applications of the competitive pricing is required in order to understand the different techniques that can be used. The respective company needs to adopt different competitive pricing theory, as this will help the company to provide different strategies to stakeholders and customers to compete in the competitive market.
Touboulic and Walker, (2015) commented that the traditional stakeholder definition is the group of individuals that can affect the achievement of the objectives of the organization. The respective author commented that there are different kinds of stakeholders who have classified kind of relationships with the organization. The major groups of stakeholders are as follows:
From the above, it can be analyzed that stakeholders are the essential part of the organizations, as this will help in having and creating huge impact on the respective organization. Touboulic & Walker, (2015) stated that stakeholder approach has indicated the view of the concept of stakeholders in such a manner that it helped in understanding that stakeholders are essential part of each organization in a direct or indirect manner.
There are different kinds of theories of the stakeholders that can be implemented in the companies, as this will help them in distinguishing the normative and analytical stakeholder theory. The different kinds of theories are as follows:
According to Meixell and Luoma, (2015), normative approach is defined as the identification of the philosophical or moral guidelines that is linked with guidelines of the different management. Andriof et al., (2017) commented that the main objective of normative theory is linked to different moral values and philosophies. The author commented that normative theory is core of the stakeholder theory. The main motive of the normative theory is the relationship between the stakeholders and firms and it is based on the moral commitments. One of the pillars of the normative stakeholder theory is that wherein the decisions of the company affect the outcome of the stakeholders and it has to be ethic. The author Bartling, Grieder and Zehnder, (2017), commented that in this kind of situation, when the action of the agent affects the other agent, the respective company has to build different principles of ethics. Andriof et al., (2017) stated that the interests of the stakeholders has the intrinsic worth and is linked to the interests of the company.
Meixell and Luoma, (2015) commented that in order to enhance to the organization stakeholder management, it is essential in nature to begin with the different instrumental approaches, the theory helps in understanding the different consequences of the organizational issues. The main aim of the stakeholder management theories is to understand the different processes through which the managers of the organization will deal with stakeholders. The entire corporation is viewed in such a manner that will help in constellation of the different interests.
According to Andriof et al., (2017), the instrumental approach is defined as the stakeholder is the investor of the company and they are precious in direct and indirect manner to the company as well. The companies need to understand and determine the different actions in an effective manner as this will help in analyzing the outcome of the business. The stakeholders need to understand the different advantages that can be gained by them in order to analyze the outcomes of the company in an effectual manner.
Furthermore, Schaltegger and Wagner, (2017) commented that the descriptive approach of the stakeholder theory is essential in nature in different organizations as this will help in analyzing the different descriptions of the tasks that is performed by the organizations in an effective manner. The company needs to be descriptive with the approaches with their stakeholders, as this will provide in understanding the composition of the phenomenon in an effectual manner.
The different theories of the stakeholders in the companies are essential in nature, as this will help in understanding the different issues that is faced by them. The stakeholders are the essential assets of the company and this will help them in understanding the different issues faced by them. The different theories and models can help in understanding the issues in an effective manner and solve them accordingly with utilization of resources in an effectual manner.
Ouimet (2018) commented that proper competitive pricing is essential in nature, as this will help in gaining competitive advantage in the market. The competitive pricing technique is essential and useful in nature, as this will help the stakeholders to provide their views on different techniques that can provide profit to the respective company in an effectual manner. The competitive pricing theory can help the company in understanding the goals and achieving them effectively. The company has to be clear with the techniques of pricing, as this will make them understand the competitors in the market in an effective manner.
According to Hsieh, Chang and Wu, (2014), the price that is quoted by the competitors is essential to be known by them, as this will help them in understanding the cost of the competitors. The quotation of the price has to be such that this will help the company in gaining profit in the future.
In any business organization, the stakeholders are the most important aspect of any business and their management is of top most concern. Stakeholders belong to different backgrounds and cultures, which makes it increasingly difficult for the company to manage them and look after their needs. However, application of the stakeholder theory is of utmost importance in the organization and it is suggested that a stakeholder`s analysis is performed whereby the organization prioritizes it stakeholders into different matrices and describes their importance in the organization (Harrison & Wicks, 2013). Once this is done the company will be able to easily manage the most relevant stakeholders in any organization.
The following diagram describes the essential component of the stakeholder management and states how they must be managed in an organization.
The analysis states that those most important to the organization with high power and interest must be managed closely whereas these with low interest and lower power must be just monitored. His matrix clearly states which stakeholders are to be given most importance and which do not need to be handled closely (Moriarty, 2014).
Other than the mentioned, the organization must take in the following steps to manage stakeholders with different interests:
Plan
Planning forms an essential part of any organizational activity and it is a necessary step, which needs to be adopted before the company, can begin a new process. The organization can engage in efficient planning in order to bring out the best the best interest of all the stakeholders. The organization needs to plan for various activities like how it will engage the stakeholders into harmony, how will it serve them to the best interests, how intense is the influence of the stakeholder in the organization and many more areas.
Maintain ethical standards
Ethical standards refer to the manner in which a business is conducted in an organization. The organization needs to see to it that they maintain ethicality in the organization. Although the profit aspect plays a key role in a business, ethics go a long way in building the good will of the organization. Hence, it is often believed that the organization needs to look after the needs of its suppliers, employees and customers alike. The organization can conduct its program ethically in order to determine the different stakeholders and win their interest. Once the interest of the stakeholders is with the organization, they will be able to manage the business in a better manner.
Communicate
The organization can maintain constant communication with the different stakeholders in order to make sure that they are equal participants in the different decisions taken by the organization (Nagle, Hogan & Zale, 2016). The communication between the stakeholders and the employees can take place in many ways like meetings, notice boards, emails and others. When communicating with external stakeholders, the organization can communicate with them through newsletters, emails, advertisements and annual magazines.
In order to cater to the needs of the different culturally diverse stakeholders, it is suggested that the organization can form different cross organizational teams in order to support the employees along with customers and communities.
The organization can use the following model to manage its stakeholders:
In the given diagram, an effective model of stakeholder management has been given.
The process involves the following:
Pricing is considered to be the most important aspect of any business organization and it is extremely difficult for any business organization to function without a proper pricing strategy. Hence, the company needs to adapt to the value based pricing strategy in order to ensure that the demand of the product remains. It can do so by:
After these factors are analyzed, only then the company will be able to understand that needs o be done about the price of the product.
The organization needs to realize their management of customer expectations is one of the key drivers of the pricing strategy. As shown in the given image, the factors that need to be considered by the organization are:
Hence, the maximum is that limit to which the organization can price its product (Johnson, 2014). However, if their pricing is higher than that of its competitors then the firm needs to see that their pricing is lower than that of its competitors and somewhere between the cost and the competitors price in order to capture the larger crowd.
Conclusion
Therefore, it can be concluded that the wicked problem that has been faced by the respective company was related to the competitive pricing and increasing competition in the market. This has affected the reputation of the company along with the expectations of the stakeholders from the company. It can be concluded that different stakeholder approaches and theories has been applied and this has helped the company in overcoming such potential issues in an effective manner. The company uses the competitive pricing strategy as this has helped them in gaining competitive advantage in the entire competitive market.
According to me, I feel there can be different potential issues that have to be faced by the company in an effective manner. I feel the company needs to understand the different pricing strategies of the other companies in the market as this will help the company in fix their pricing accordingly. According to me, there can be issues in different companies; however, that has to be solved in an effective manner with implementation of different theories and models of competitive pricing approach.
Furthermore, I have seen that the company needs to understand the different stakeholder’s views, as they are essential to the growth of the company in a direct or indirect manner. The companies can use the stakeholder theory and approach in the future, as this will help them in providing a solution to the stakeholders in case of any discrepancies. As per me, I have seen that the potential issues have been solved by implementation of different stakeholder and competitive pricing techniques and this has helped them in solving the matter more effectively.
Lastly, I can conclude that the respective company can use the stakeholder normative and mixed approach. The company can gain competitive advantage in the competitive business environment with implementation of strategic and soft systems modeling approach as this can help them in solving different general problems as well. The action plan has to be prepared by them in an effective manner, as this will help the company along with the stakeholders to understand and clarify the situation in an effective manner.
References
Andriof, J., Waddock, S., Husted, B., & Rahman, S. S. (2017). Unfolding stakeholder thinking: theory, responsibility and engagement. Routledge.
Bartling, B., Grieder, M., & Zehnder, C. (2017). Competitive pricing reduces wasteful counterproductive behaviors. Journal of Public Economics, 156, 34-47.
Beringer, C., Jonas, D., & Kock, A. (2013). Behavior of internal stakeholders in project portfolio management and its impact on success. International Journal of Project Management, 31(6), 830-846.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press. (Crane & Matten, 2016)
Gupta, V., & Çakany?ld?r?m, M. (2016). A WTP?Choice Model: Empirical Validation, Competitive and Centralized Pricing. Production and Operations Management, 25(11), 1866-1884.
Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value, and firm performance. Business ethics quarterly, 23(1), 97-124.
Hörisch, J., Freeman, R. E., & Schaltegger, S. (2014). Applying stakeholder theory in sustainability management: Links, similarities, dissimilarities, and a conceptual framework. Organization & Environment, 27(4), 328-346. (Hörisch, Freemann & Schaltegger, 2014)
Hsieh, C. C., Chang, Y. L., & Wu, C. H. (2014). Competitive pricing and ordering decisions in a multiple-channel supply chain. International Journal of Production Economics, 154, 156-165.
Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education.
Johnson, M. P., & Schaltegger, S. (2016). Two decades of sustainability management tools for SMEs: how far have we come?. Journal of Small Business Management, 54(2), 481-505.
Johnson, P. F. (2014). Purchasing and supply management. McGraw-Hill Higher Education.
Mansell, S. (2015). Book Review: Rejoinder to Veldman’s review of Capitalism, Corporations and the Social Contract: A Critique of Stakeholder Theory (Vol. 22, No. 2, pp. 271-275). Sage UK: London, England: Sage Publications.
Meixell, M. J., & Luoma, P. (2015). Stakeholder pressure in sustainable supply chain management: a systematic review. International Journal of Physical Distribution & Logistics Management, 45(1/2), 69-89.
Miles, S. (2017). Stakeholder theory classification: A theoretical and empirical evaluation of definitions. Journal of Business Ethics, 142(3), 437-459. (Miles, 2017)
Moriarty, J. (2014). The connection between stakeholder theory and stakeholder democracy: An excavation and defense. Business & Society, 53(6), 820-852.
Morsing, M., & Schultz, M. (2016). Corporate social responsibility communication: stakeholder information, response and involvement strategies. Business Ethics: A European Review, 15(4), 323-338.
Nagle, T. T., Hogan, J., & Zale, J. (2016). The Strategy and Tactics of Pricing: New International Edition. Routledge.
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