Although primary objective for managers is to maximise shareholders’ wealth, but many firms are started to focus on other stakeholders’ interests in recent years. Company can prevent transfer the damage of stakeholders’ wealth to shareholders when focus on stakeholders’ interests. In other words, “social responsibility” for the companies is to maintenance stakeholders’ relations in order to provide long-term interests to shareholders. By this way, conflict, turnover and litigation of stakeholders can be minimise. Obviously, company can achieve their primary objective by cooperation with stakeholders instead of conflict with stakeholders (Smart, Megginson, Gitman, 2002).
Stakeholders are interest of an individual or groups that directly or indirectly affected by the organisation’s activities, policies and objectives (Henry Frechette, 2010). Stakeholders can be divided as internal (managers and employees) and external (shareholders, customers, and suppliers) (BPP F9). Different stakeholders may have common interests or conflict interests with company. Company board members or management must take care about stakeholders’ interest. They can’t make the decision based on their own interest or their relation with others organisation. Conflict of interest will arise when interests of organisation act in concert with managers’ personal interests or interests of another person or organisations, (Anon, no date).
Management vs. Employees
Every employee wants maximise their salaries and benefits based on particular skills and the rewards available in different employment. Most employees also want to continue their employment (ACCA F9). However, when sexual discrimination was happened in a company, there will be a conflict of interest between the management and employees. Sexual discrimination occurred when sex of a person become the factor that takes into considers when management gives a promotion, job, wages, training or others employment benefits. The sex discrimination always claims by women because women feel they are unfair discrimination against man. For example, female employees claimed that managers only promote position opportunities to male employees. However, sexual discrimination also happens on man sometimes (Reference for Business, no date).
Aubrey James (2010) states that sexual discrimination was happen in Wal-Mart when managements assigned job, position promotion, wages and training for women. In Wal-Mart, female staff made up 70% out of the total staff. However, less than 1/3 managers are female staff. Besides, Wal-Mart also set a policy that described women’s salary pay are less than men staff and workers can’t argue. According to Dr. Richard Drogin (2004) research, he found that Wal-Mart female workers earned maximum 37 cents hourly less than male workers. Furthermore, women make up 72% of the total Wal-Mart employees, but only 33% of its managers and 92% of Wal-Mart's cashier is women, but only...