- The managerial perspective of Stakeholder Theory
The management should apply stakeholder theory to explain whether the management cares about the concern of the charity one-parent families. The stakeholder’s theory states that the organization’s shareholders include everyone who is impacted by the organization and its working. In this regard, I think the bank management should apply the perspective of stakeholder theory in giving credit or loans to lone parents who are struggling with debts. The struggling –single parents also make part of the bank’s essential stakeholders. Therefore, the management should consider their concerns and give them loans instead of denying them.
According to Henry et al. (2017), Banks and other organizations are compelled to make profits, satisfy their clients, and promote organizational growth. For instance, the Bank’s management should consider lowering the Loan interest rates to benefit the lone-parents who are struggling with debts. This will ensure that single-parents benefit from the credit given by the bank. The application of shareholder’s theory will promote a close relationship with single-parents who are struggling with debts since they are essential stakeholders. Also, having this kind of relationship in will aid in building trust between the Bank and clients. Once stakeholders have established a relationship with the bank, the management will be able to serve them better.
- b) If we applied an ethical perspective of Stakeholder Theory, should management care?
Suppose we apply the ethical perspective of stakeholder theory. In that case, the management should be able to care about the lone-parents’ concerns who are struggling with paying their debts on loan granted to them by the Banking industry. According to Schaltegger, Hörisch, & Freeman (2019), stakeholder theory addresses some of business ethics, morals, and values, particularly when the management of stakeholders is involved with an organization. The theory seeks to enhance the relationship with stakeholders, thus improving organizational efficiency. Besides, the stakeholder theory tends to foster a practical, efficient, effective, and ethical way of managing organizations that operate in a complex and turbulent environment. The application of stakeholder theory is ethical because it will help lone-parent access credit terms, which will help the bank industry provide them with better financial terms. The shareholder’s theory is very comprehensive in its approach since it advocates treating all stakeholders with fairness, honesty, and even most generosity (Henry et al.,2017). In this case, the bank management should apply the shareholder’s theory from an ethical perspective in giving loans to the single-parents who are struggling with debt arrears as their fellow counterparts’ couples who have children.
- c) The banks should use their annual reports to defend their position (legitimacy)
If society considered that the banks’ policies were unreasonable, I think the banks to use their annual reports to defend their position. This is because they will be able to determine the creditworthiness of single-parents who are struggling with debt from their loans. The information and statistics will help the management to base their decision on whether to give out loans to this group of individuals or even to lower the loan rates to allow them to have access to credit.
References
Schaltegger, S., Hörisch, J., & Freeman, R. E. (2019). Business cases for sustainability: A stakeholder theory perspective. Organization & Environment, 32(3), 191-212.
Henry, N., Pollard, J., Sissons, P., Ferreira, J., & Coombes, M. (2017). Banking on exclusion: Data disclosure and geographies of UK personal lending markets. Environment and Planning A, 49(9), 2046-2064.