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The Organization of Modern Corporations & Interaction with Stakeholders

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  • 0:57 Organization Method
  • 1:40 Department of Public Affairs
  • 2:16 Investor, Customer &…
  • 4:07 Corporate & Public Relations
  • 5:19 Environmental Affairs
  • 5:46 Human Resources
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Lesson Transcript
Instructor: Jennifer Lombardo
In this lesson, you will learn how modern corporations have to organize their departments in order to provide direct interaction with various stakeholders.

Stakeholders

How do corporations organize internally to respond to and interact with stakeholders? A stakeholder is any person or group associated with the organization that has a stake in the organization's output. Corporations face a massive challenge in trying to organize, communicate and respond to all of their different stakeholders.

Gas Free Baby Foods is a prime example of a multinational corporation that has established a program that allows it to communicate to each of the following stakeholder groups: government, stockholders, customers, community, general public, media, environment and employees. In this lesson, you will learn through the example of Gas Free Baby Foods how modern corporations organize internally to interact with various stakeholders.

Organization Method

The most efficient way for corporations to interact with each different stakeholder group is to establish boundary-spanning departments, which are offices within an organization that interact across boundaries that divide the company between different stakeholders. Gas Free Baby Foods has followed this organizational method so that the company has one separate internal department that communicates directly with each group of stakeholders. Let's take a look at each of Gas Free Baby Food's boundary-spanning departments and their corresponding stakeholder groups to see the benefits of their interactions.

Department of Public Affairs

Gas Free Baby Foods has to report directly to many government stakeholders about food laws and public policy. The company has established a boundary-spanning department called the Department of Public Affairs, in which they track government laws and monitor policy trends. For example, the company recently has decided to launch an organic line of baby food. This department was in charge of inquiring about the definition of organic in order to comply with government regulations for labeling food.

Investor Relations

Another boundary-spanning department that Gas Free Foods has created is called investor relations, in which they handle audit requests and SEC filings and communicate with stockholders. SEC Filings are financial statements requested by the U.S. Security and Exchange Commission. This department educates and updates investors and works at developing long-term positive relationships to help grow the company.

Customer Relations

Customer relations is Gas Free Foods' division that interacts directly with their customer stakeholders. Customers are able to call a 1-800 number to have questions answered about the baby food or to express their concern about quality. (1-800 Gas Free) Last year, the department was in charge of a massive recall because the Pear Mango food was found to contain sand filaments. This department is extremely important to maintaining communication and providing feedback directly to the customers. Many organizations also have added a social media section within their customer relations department to monitor customers' conversations about their product.

Community Relations

Gas Free Baby Foods' community relations branch also provides interaction directly to the community stakeholders through volunteer projects, charity participation and partnerships with schools. The company is known to charitably fund preschools in disadvantaged areas and donate free baby food across the world. This division helps develop community loyalty and creates a positive image for the company.

Corporate Relations

Gas Free Foods' Corporate Relations Office handles varied duties targeted at the general public, from social monitoring to environmental scanning of competitors. This group provides feedback on trends, such as competitors providing new gluten-free baby food products.

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