Multinational Oil Palm Plantation Company: KIDSA
With the granted license, SKIDS is entitled under the terms of the license to dispose the waste from the palm oil manufacturing wherever is convenient for it which is river. Local government took legal action against SKIDS due to feared that the waste would affect the river, quality of the water and hence affect the tourism in Bar National Park. The State court granted the local government’s request to prevent SKIDS disposing the liquid waste to river. However, upon appeal to the National Supreme Court, SKIDS been granted the permission. Few shareholders argued that it was better to close the plant rather than to pollute the river.
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In this case, we are able to identify the stakeholders and to extent the degree of their power and interest that could affect the operation of SKIDS. Furthermore, we are required to suggest some actions to resolve the problems regarding the stakeholders’ competing objectives and to discuss the extent of Kiddo’s mission is consistent with the activity in this case. (a) Categories, according to Mendelssohn matrix, the main stakeholder groups of SKIDS with respect to the decision about the disposal of the liquid waste. You should explain what the power and interest of each stakeholder groups you have digitized are likely to be.
Please draw the Mendelssohn matrix to categories those stakeholders. (mom) Stakeholders are individuals or group of individuals who have direct or indirect interest or power to influence on an organization’s actions or decisions. In this case, various stakeholders are identified. They are National government of Makes, general public, local residences, employees, Local government, and shareholders. These stakeholders can be classified and categories based on internal or external, direct or indirect, primary or secondary, to extent of interest and degree of power or influences.
The table 1 categories the stakeholders in term of internal or external, direct or indirect and primary or secondary. Meanwhile, power and interest of stakeholders can be examine through Mendelssohn matrix which show by table 2. I Ole 1 : Calculations AT stakeholders Stakeholders Internal / External Direct / Indirect Primary / Secondary National government of Makes External Indirect Secondary General Public Local Residences Local Government Shareholders Internal Direct Primary Table 2 Interest Power / Influences Low High General public (Minimal Effort) Local residences (Keep Informed) : Mendelssohn Matrix
Local government (Keep Satisfied) (Key Players) As mentioned, 3 stakeholders are identified and categorized based on interest and degree of power or influences. General public was classified as Minimal Effort, having low interest and low power (AL). As SKIDS operate in remote area, disposing waste to river are least likely will affect general public and thus they have low interest with SKIDS. Besides, since general public have no direct interest and no relationship with SKIDS, they have low power to influence Kids’ operation. Local residences was classified as Keep Informed, having high interest but low power (HAL).
Local residences are living nearby the SKIDS factory and will affected if the liquid waste were disposed to the river. Besides, most of the residences worked in SKIDS and their livelihood will be affected if the plant closed. Thus, they have high interest with SKIDS but low power to influence the operating decision in SKIDS. Local government was classified as Keep Satisfied and have low interest but high power (LA). Although RMI million granted from National Government of Makes are from the payments which it received from SKIDS, local government have no direct relationship with SKIDS and will not affected if the plant were closed.
Thus, local government have low interest with SKIDS. However, local government have high power to influence the activity of SKIDS. For example, local government took legal action against SKIDS in the local court to prevent the disposal activities into the river. National government of Makes classified as Key Players, having high interest and high power (H). Total of SUDSY million as payment for license from SKIDS and saw oil palm plantation as an important aspect in economy showed National government of Makes have a very high interest in SKIDS.
Besides that, National government also lassie as high power to influence SKIDS. Any changes in policy or term and conditions in licensing will directly affect the operation of SKIDS. Shareholders classified as Key Players, having high interest and power (H). Shareholder is an individual that legally owns a share of stock in the company. The goals or shareholders is to earn higher dividend or maximize their wealth. Shareholders whom have higher portion of shares have higher interest and power to influence the operation of SKIDS.
Shareholders able to use their right and power to influence the decision of Board of Directors and management team especially during Annual General Meeting (GM) or Extraordinary General Meeting (GEM). Conclusion, identifying and categorizing stakeholders are important as different group of stakeholders have different interest and power towards an organization. Furthermore, different strategies for different groups can be easily generated based on ten degree AT power Ana to extent AT tenet Interest. (b) Advise the Board of SKIDS of the actions it should take to resolve the problem of its stakeholders’ competing objectives. Mm) General public which categories as Minimal Effort, having low interest and low rower makes them open to influence. Usually, they are lower in contrast with SKIDS objectives due to lack of interest and power and have no direct relationship with SKIDS. So, to resolve the problem, SKIDS can announce the direction which SKIDS heading to public as they are more likely than other groups to accept what they are told and follow the instructions given. For local residences, they should keep informed by the SKIDS regarding the strategy which company want to implement.
Local residences, largely will be employed to work in oil palm plantation factory always have higher interest in the tragedy of the SKIDS as it will affect their livelihood but lack of power to do any change. To resolve the problem with this group, SKIDS should have appropriate communication channel and education for them. SKIDS should convince them that the plans are Justified to prevent the local residences will try to gain more power to against the strategy implemented by Joining with parties with high power but low interest such as local government or environmental care community.
Local government, which had low interest but high power in affecting the SKIDS strategy. To resolve the problem with this group, SKIDS should keep satisfied them to revert them gaining more interest and moving to higher interest and power group. SKIDS can use intervention by reassuring them of the outcomes of the strategy well in advance such as benefits of the strategy will be enjoyed by the groups if well implemented. National government of Makes, which keep to develop its economy and saw oil palm plantation as an important aspect would have highly interest and power.
As key players, their participation in the planning process is critical as they are the major drivers of change and any objection to the strategy could stop the management plans. SKIDS would need to have frequent communication as a medium for them to participate and discuss the implementation issues. For example, if National government of Makes were concern about the Tourism activities, they might impose new policy regards the environmental issues which might affect the operation of SKIDS.
Lastly, shareholders as an individual that legally owned a share of stock in the company can influence the company operation especially with the large amount of shares by expressing their objections during meeting such as Extraordinary General Meeting and Annual General Meeting. Although shareholders usually concern with heir wealth, but in this case, few shareholders also concerned with the environment issues and suggest to close the plant. Inconsistent of objectives between shareholders and company may occurs internal division and hence affect company operations and performance.
To resolve the issue, SKIDS would need to have frequent face-to-face communication and propose some solution to solve the environment Issues sun as est.. Lolls a Tuna Tort restoring ten cleanliness In ten river and convince the shareholders by providing a solid data that the liquids waste are harmless to the river and environment. C) Discuss the extent to which Kiddo’s mission statement is consistent with its plan to put the liquid waste into the river. Mission statement is a published statement that describe the basic purpose of an organization which is reason of existing.
It outlines the broad direction that an organization will follow and summarizes the reasoning and values that underlie that organization. In this case, Kiddo’s mission is ” SKIDS exist to make the maximum possible profit for its shareholders whilst causing the least damage to the environment. SKIDS will, at all times, be a good corporate citizen”. There are 3 focus area that company aimed o which are maximum profit for its shareholders, minimize the damage to the environment and lastly be a good corporate citizen. SKIDS aimed to maximize the shareholders’ wealth.
As such, minimize the operation cost and maximize the company profit is a strategy of SKIDS try to implement. Thorough to the case, manufacturing techniques proposed by SKIDS will produce a liquid waste and the cheapest way to dispose of this liquids is dispose it in a river near the plant. Although disposing the liquids waste to river may minimize the operation cost, however, it would likely to create additional cost such as court fees. For the second focus area, SKIDS aimed to minimize the damage to the environment.
However, the manufacturing techniques that Kiddo’s proposed will produce a liquid waste of brownish color and stinking smell. To minimize the operation cost and maximize the company profit, SKIDS intends to dispose the liquids to the river near to the plant. Although SKIDS claimed that liquids is harmless to human or animal health as it is organic wastage, however there are no solid evidence or statistics that prove Kiddo’s claims and stinking smell produced will likely affect the local residences .
The river is the main source of water for the local people and he river is flowing through a reserved land, known as BAR National Park, a main attractions for tourists. If the river was polluted, it will affect the daily life of local residence and affect the economy of the Makes as well as those residences highly rely on tourism activity. Thus, SKIDS failed to fulfill the second focus area in the mission statement Lastly, the third focus area of Kiddo’s mission aimed to is be a good corporate citizen. SKIDS fulfill one of the conditions of the license is to employ local people wherever possible, which it has done.
Fulfillment of this condition create more employment opportunities for the local residences whom are poorer due to less development as the place is very remote area and has no towns or cities nearby. But, the intention of SKIDS to dispose the liquid waste into the river may pollute the river and hence affect the quality of water which are main source of water for local people. As a conclusion, although SKIDS manage to fulfill according to the focus area in ten melons statement, out tenure are some solution Tanat SKIDS Tattle to concern. 10 resolve the problem, SKIDS need to provide solutions to overcome the issue such as environmental issue.