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Chester's Success In The Competitive Marketplace

1083 Words5 Pages

In the competitive marketplace, many managers are faced with difficult decisions that sacrifice important facets of their business in order to remain competitive. It is imperative that managers broaden their horizon to see past just the bottom line profits. As such, managers are turning to a stakeholder view of their firms to obtain a well-rounded vantage point when making decisions.
Providing products used in health care, Chester currently sits at the head of the market, with 23% market share, demonstrating a consistent growth trend, along with increasing profit values. As of date, Chester’s success can be attributed to decision-making with a focus on differentiation from competition, establishing itself as a leader in high-end, reliable …show more content…

This gives rise to an ethical dilemma. The company needs to determine what will be given importance and which will be sacrificed; a tradeoff between quality and revenue/customers. In terms of quality, increasing the defect rate from 0.62% to 6.7% will cause issues with customers that value this characteristic. Especially for those that use these products in the health care sector, a low defect rate is more assuring in the profession of saving lives. On the flip side, to retain customers and keep turning a profit, the new alloy is less expensive to produce and will increase price competitiveness in the market. The key issue is to determine the modus operandi that minimizes the negative impacts of the tradeoff between quality and cost. The VPs of Marketing, R&D, and the General Counsel must reach an agreement that retains Chester’s competitive market share and also maintains quality needs for this …show more content…

This concept looks at prioritizing the multiple stakeholders based on an examination of their power, legitimacy, and urgency, as driven by the decision maker’s individual motivations. Using the salience framework as the base, the framework is altered to account for motivations as impacting the three dimensions. As stakeholders influence decision making in the company, the company’s motivations behind each stakeholders’ needs are ultimately driving factors behind every choice made (Weitzner & Deutsch, 2015). Kelman organizes the motivations into three categories: moral, relational, and instrumental. A moral motivation ensures that actions match the individual’s personal belief system. A relational motivation uses reciprocity to maintain a relationship between the company and stakeholder. Instrumental motivations are based on the desired outcome, be it positive reinforcement or negative punishment. These motivations are internalized by the company in order to make dynamic decisions. The effects of these motivations can be seen in the classifications of power, urgency, and legitimacy (Parmar, Freeman, Harrison, Wicks, Purnell & De Colle, 2010). For each of the salience qualities, different motivations alter the degree and perception of the quality. This method of prioritization will allow the company to rank each effected stakeholder based on their power, legitimacy, and

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