How to Finance a Staffing Agency

Do you own a growing staffing agency? Read this article to learn how to finance your agency using your invoices as collateral.

Running a staffing agency requires a combination of good sales skills along with solid organizational skills. As an owner (or manager) you need to make sure that you are signing on new clients who will use your staff. At the same time, you need to recruit quality staff that will ensure that you meet your client’s expectations. And while you do this, you also need to make sure that payroll is handled so that your team is always paid on time.

For many staffing agency owners, this last point can be a real problem, especially if the company is starting up or growing too quickly. Most commercial clients will be happy to use your staff for a contract, but they will pay their invoices in 45 to 60 days. In the meantime, your company needs to cover all employee payroll. You have to pay salaries, retain taxes and cover any benefits you offer. Many agencies just can’t afford to wait that long to get paid.

Most agency owners will opt for a line of credit, if they can qualify for this form of business financing. But qualifying for a line of credit, or a business loan for that matter, can be very difficult. This is especially true for staffing agencies that have no hard collateral. As it’s well known, most institutions provide business loans to companies that have both, the earning ability to pay the loan back and enough collateral to cover the loan if they can’t pay it back. Because of this, only staffing agencies with good track records, solid customers and seasoned management teams get institutional financing.

Unless you manage to get external funding, your staffing agency’s growth will always be limited by your capital. However, there is one funding alternative that will help solve your problem. If you look at the situation, you’ll see that the problem is one of timing. You need to pay employees now, but your clients want to pay later. And the way to bridge this gap is to get an advance on your client invoice. This provides you with the funds to meet your current obligations and handle new projects.

This solution is called invoice factoring and is offered by factoring companies. A factoring company considers your accounts receivable (invoices) from good clients to great collateral. Because of that, they are willing to advance you funds against those invoices. One advantage of factoring is that it helps you meet your current liabilities. A bigger – and often ignored – advantage is that it can help your company to bid for bigger contracts. How is that? Many staffing agencies have been able to win very large contracts and then arranged to factor their invoices before their payroll is due. The potential of this strategy is obvious. When done correctly – and it does take good organizational skills – it can help grow your company very quickly. Because of thisHealth Fitness Articles, accounts receivable factoring can be a great tool for staffing agencies with good growth potential.

How to Use Invoice Factoring to Finance a Staffing Agency

Although the economy is recovering, the strength and duration of the recovery remain uncertain. Because of this, many companies are reluctant to hire permanent employees, opting instead to use a tempo…

Although the economy is recovering, the strength and duration of the recovery remain uncertain. Because of this, many companies are reluctant to hire permanent employees, opting instead to use a temporary staffing agency to fulfill their personnel needs.

The staffing industry has seen a considerable increase in their level of activity as companies start ramping up their production. Although this is very good for the industry, it also creates a cash flow problem. The employees that are hired by the agency need to be paid weekly (or every two weeks), but clients pay their invoices in 30 to 60 days. Therefore, staffing agencies need a financial cushion to handle these expenses until their clients pay. The demands on this financial cushion will increase if the agency lands a new contracts.

One easy way to fix this problem is to put more capital into the business – either directly or through investors. This can be complicated, and could involve giving up some equity in your company. Another alternative is to get business financing – either through a business loan or a line of credit. Both of these products can be hard to get as the company will need to show solid assets, an experienced management team and a well crafted business plan. The problem is that staffing agencies don’t have assets in the traditional sense of the word – there is little if any real estate, and no machinery or equipment. The assets are their employees, and those walk out the door every day. There is an alternative to conventional business loans that can work well in this situation – it’s called invoice factoring.

Factoring provides an advance payment for the staffing agency’s a/R. This reduces the time you wait to get paid from 45 days to just a few days. This reduces your reliance on a cash cushion and provides liquidity to meet your company’s expenses.

Also, invoice factoring is easier to get than conventional financing. Most factoring companies consider your invoices to be strong assets. Because of thisFind Article, a factoring company will usually be willing to extend financing to small businesses that have potential and solid customers. This makes invoice factoring a very accessible form of financing.

Financing for Your Staffing Agency

Do you own a staffing agency? Do you stress about meeting payroll? Learn how to finance your invoices and get money to meet payroll – the easy way.

As a staffing agency owner, your biggest concern is making sure your employees get paid on time – always. In this article, we’ll discuss a tool that will help you get the funds to meet payroll every time. We’ll also talk about a financing tool that will let you take on new contracts, even those that you think are too big and can’t possibly afford to win. This financing tool is easy to qualify for (it’s NOT a business loan), can be set up in days and can give you all the necessary funding your staffing agency needs.

This tool is called invoice factoring, and also referred to as receivable factoring. This financing is not offered by a bank, but rather by a factoring company.

If you are like most agency owners, your problem is not lack of work or customers. I am sure you have plenty of both. Your biggest problem is that your customers take between 30 and 60 days to pay their invoices. But, your employees need to be paid weekly (or bi-weekly). And unless you have a fat bank account, the math does not work. Sooner or later, you’ll run out of money.

But what if you could eliminate slow paying clients? No, I don’t mean that you should stop doing business with them. I mean, what if you could turn them into quick paying clients? What would happen to your business if every client was guaranteed (yes, guaranteed!) to pay you in 2 business days? How many of those clients could you take?

Let me have a guess. You could take as many of those clients as you could get your hands on.

By factoring your staffing agency receivables, you can turn your slow paying invoices into quick paying invoices. The process is simple:

1. You do your work, as usual. You bill your customer but then submit a copy of the invoice to the factoring company for financing
2. The factoring company provides you an immediate advance on 90% of the invoice. You can use that money to meet payroll and pay expenses.
3. The factoring company waits to get paid by your customer
4. Once they are paid, they rebate the remaining 10%, less their fees

The main requirement for factoring is that you do business with good paying customers. If your customers pay regularly (but slowly) you can almost always qualify. And as opposed to a business loan, your personal credit is usually not an issue.

Personal Finance Articles, Not Another One: How To Change Your Mind About Your Personal Finance NOW!

Do you do personal finance budgeting? Tired of reading Personal Finance Articles that only make you feel bad about your definition of personal finance? Why is it important to plan personal finances considering all the personal finance facts and personal finance curriculum available? Find out today

Many personal finance articles have been written on the issue of money. Can’t say I have been moved to action by many. First I’d like to say it is ok that you feel down about the current situation about your personal finances. I give you permission to feel your feeling for the next 24 hours and then pull yourself by your boot straps and let’s what we can do.

There exist many a definition, I want to share with you my personal finance definition:

Financial freedom is not an event, it is a skill.

I bet right now with the current economic situation you are saying to yourself, “I just wish I could the lotto!” Boy don’t we all and yet statistics and personal finance facts show that the majority of people who win the lottery, end up broke and worse off before their winnings! Imagine that. You among the many seeking wealth, riches, fame few people realize that money isn’t the solution to their problems; the way you think about money is the problem and the solution.

I can almost see you going oh yeah, give me the money and I’ll show you change in mindset!

My favorite entrepreneur of all times, Henry Ford was once asked, “What if you lost everything you own?” He responded without missing a beat: “I’d have it all back and more within 5 years.”

Being a master of your own personal finance is not about what is in the bank; it’s about the ability to acquire the skill that will show you how to produce new streams of income and wealth based on your knowledge and experience.

So before we go any further on this issue let us tackle the real problem here that is impeding your personal finance for good! Why you might ask? Well without the mastery of these 5 steps, your desire for your goal for financial success and financial freedom is highly unlikely! This is why big players in any industry have coaches, Oprah has a life coach, football players and basketball players have coaches and mentors. Tiger woods after every bad game will go in for coaching and training. Why? Those who achieve great financial success do not go it alone. They always have a team. Those who achieve great poverty have the do it yourself mentality!

Why is it important to plan personal finances? Well…here are:

5 Steps That Will Guarantee You Become Master Your Personal Finances

1. How do you think about money? Say you come up with an idea to do something. Do you think that will never work? Are you afraid to follow through? Are you scared of loosing money or do you see every dollar spent as an investment?

2. How do you manage and invest your time? The average man has at his disposal 6 discretionary hours. This is time they can do whatever they want. No work, no chores etc. Many will watch T.V., attend pricey sports events, spend money on meals at a restaurant and movies, see where I am going with this? Do you do personal finance budgeting?

3. How do you leverage the talents and life experiences you ALREADY POSSESS?
Most people see their experiences as failures. They only talk of how they tried to do something as failed. Thomas Edison failed more than I care to count, and yet he persisted to light the whole world. Many of life’s failures are people who did not realize how close they were to success when they gave up. Thomas A. Edison

4. Do you have a mentor and coach with a proven personal finance curriculum? This is the true measure of your desire for financial freedom. This is where you literally put your money where your mouth is, can’t afford a mentor you say? Well what was the last book you read? Gossip magazines do not count as literature sorry :!

5. What do you think is “risky,” and what do you think is “safe and secure”? Most people never break into the realm of the 5% wealthy group who own 95% of the worlds resources because they want to play it safe. They want the money, the fame, the accolades but they feel they should not have to go through the process of creating this wealth. No wonder the internet and other places are full of scams and get rich quick opportunities. Remember this success does not happen overnight, but one night success does happen. Someone once said to meComputer Technology Articles, it takes 3 years to be an overnight success!

Role of digital advertising agency and digital media agency

Digital media agency is an organization which offers technical support and development in a creative and strategic manner for screen based services and products. A digital media agency helps its business clients to meet specific targets of the market. During the period of traditional advertising, a digital agency meant to be a printing agency where print works are done.

Both the digital world and its consumers are changing with the passage of time. Thus, marketers now a days are looking for people who have solid skills and understanding of the digital world. A corporation cannot think to survive without a strong marketing department. It’s hard to imagine where a business fits in without digital advertising agency. There are many different aspects that can be beneficial to your company. From strategists and analysts, designers and developers, there are a lot of roles that a digital advertising agency play in the evolution of your established brand, for this you need separate digital agency and media agency for a better understanding.

Digital media agency is an organization which offers technical support and development in a creative and strategic manner for screen based services and products. A digital media agency helps its business clients to meet specific targets of the market. During the period of traditional advertising, a digital agency meant to be a printing agency where print works are done. But now it has a total understanding of the medium and process to successfully promote a brand through different digital media landscapes. Those which achieve success take an extra advantage of interaction providing an additional consumer value. The domain of marketing brand promotion is no longer traditional.

Role of digital media agency:
Digital media agency deals with campaigns of marketing for a cause of the business through internet and other digital medium. Digital media is mainly hired for creative and technical services that are required for a business. On the other hand, it is not just sufficient to know about the tools and technologies. An excellent digital media builds up went it consists excellent creative heads who are expertized story tellers and solution givers. These agencies have tie ups with business clients and they continuously keep thinking of new concepts and designsfor the benefit of the client in order to attract more buyers. Hence, we can conclude that the role of a good digital media agency is to promote business through a cost effective and yet successful strategy. This helps business thrive in this rapidly evolving digital world.

Digital agency vs. media agency:
A digital agency is known to be responsible for the creative development of a business. It provides strategic and technical support promoting the content of marketing. A digital agency cannot be confused completely with a media agency. Where digital agencies earn money from their creative campaigns, media agencies make profit from ads advising companies in planning and managing along with its advertising budget. A media agency recommends as to where and how to spend the media budget and buy services, ad spaces, discounts, negotiate prices, and special conditions with the publishers.
Digital and media agencies earn the maximum out of the customer’s budget and campaigns by working together. As already mentioned, digital agencies are liable for the creative development of advertising campaigns.

To give this scenario a better picture, just imagine yourself to be the advertiserwho wants to know how your campaigns are going on.In order to know you ask your media agent who presents you the negative results. Nobody likes to failso you start optimizing. As a result you require a new creative substance thus media agent speaksto the digital agent about your requirements, they start the process of creating it, return it to the media agent who forwards it you. Don’t you think directly communicating with your digital agency is much easier?
Hence digital agencies depend on media agenciesFree Web Content, their work and responses without having any other options. It is a better idea if digital agencies and media agencies work in collaboration saving time which is money.

EU Finance Ministers to Finalize the Program of Economic Governance

EU finance ministers have to improve the EU’s economic governance reform program agreed in the future violations of financial discipline in the EU Member States will “automatically” face punishment. EU refuses to correct the violation of fiscal discipline The same day, led by the strengthening of economic governance Rompuy panel held its last meeting in Luxembourg, aims to finalize the EU economic governance reform program. Van Rompuy issued after the meeting a written statement that the final meeting of EU finance ministers reached an agreement, which marks the EU to strengthen economic governance in the forward of “a big step.” The European Commission late last month to draw up a financial monitoring legislative proposals, the main contents include: strict compliance with the EU to force Member States, “Stability and Growth Pact” in the deficit should not exceed gross domestic product (GDP) of 3%, public debt shall not exceed the GDP 60%, the Union of these two indicators will be exceeded in a member of the punishment. Punishment measures are: a member of the excessive deficit will be required to hand over its 0.2% of GDP non-interest bearing deposit, and if members can not be exceeded by the European Commission’s warnings and recommendations to correct, this deposit will be into a fine; on the debt exceeds the member, asking them to cut the total debt each year 1 / 20, if I can not, should be fine. Van Rompuy said that the EU finance ministers agreed that all decisions will be punished in accordance with “reverse majority” voting system to make, is fine by the European Commission under the relevant rules to execute, no longer need to discuss the finance ministers of Member States, for violation of the European Union fiscal discipline and refused to correct the member states, the European Commission will recommend punishment, unless a majority of EU member states in order to effectively oppose, or penalties into effect automatically. Euro group president, Juncker of Luxembourg said that in this meeting, EU finance ministers to improve economic governance framework of agreed and punishment mechanism is expected to take effect from 2012, but details have yet to continue the discussion. In fact, due to serious differences between the Member States, the Working Group’s final plan may be far from the European Commission’s legislative proposals. Member States there are two main differences now. First, decide whether the punishment exceeded the member who made. European Commission in the legislative recommendations to the power held in his hands, although Germany, the Netherlands, Finland and other support to the European Commission’s legislative proposals, but France, Italy and other countries insist on the punishment reserved for ministers. Second, a warning from the members to end excessive punishment, the Member States to correct how long. In this regard, countries and uncompromising. In addition, whether and how to punish a member of the macroeconomic imbalances, the greater the differences between member states. These key issues are pushed to the discussion after the EU summit in autumn. According to EU finance ministers reached a compromise, a State constitute a violation of the EU fiscal discipline, excessive deficit, there will be 6 months time to take corrective measures, the EU finance ministers will be a simple majority of members decided to take measures of a country the adequacy of the Member States only if they refuse will face penalties. The relatively more strict budgetary discipline started only applies to the euro zone countries and then extended to the outside of the UK all the EU member states. European Union finance ministers also supported the establishment of an early warning mechanism to detect the potential macroeconomic risks euro-zone members, such as real estate bubble and the gap in competitiveness. In addition, the EU finance ministers also said that as an interim goal, the euro zone is necessary to establish a more effective crisis response mechanisms, to avoid the beginning of the chaos in aid to Greece, but the specific structure to be further discussion. Daily Roundup France, Germany, the adoption of punitive measures to strengthen financial discipline in the EU French President Nicolas Sarkozy and German Chancellor Angela Merkel, 18, in the northwestern city of Deauville, France to hold bilateral joint statement after the meeting, said France and Germany have agreed to jointly recommend the European Council to take punitive measures to strengthen the EU fiscal discipline. The statement said that France and Germany stressed the need to strengthen and speed up EU financial supervision and coordination of economic policies, the two sides that should be taken to a wider range, more operational preventive and corrective measures of punishment, to urge the EU member states to comply ” Stability and Growth Pact. ” France and Germany also found it necessary to “Lisbon Treaty” to modify, and requested the President of the European Council in March next year before the draft amendments to establish a strong mechanism of permanent crisis, and the violation of the European Economic and Monetary alliance based on the principle of suspension of voting rights of States to take punitive measures. However, the latest proposal for France and Germany, British Prime Minister Cameron clearly shows that the British Government will not support any power assignment to the EU. Although it is not British euro membership, but EU member states, any of the “Lisbon Treaty” changes are needed after the approval of all EU member states, or even need to put to a referendum in Britain.

Finance Recruitment Agency : Get the Best Placement

Finding a right job is never easy. We live in an extremely competitive world with fierce competition for jobs in all fields. Your education is of great importance when looking for a job. Finding a right job is never easy. We live in an extremely competitive world with fierce competition for jobs in all fields. Your education is of great importance when looking for a job. Many people these days opt for higher education to get better placements. Other than education, your skills to take advantage of the right opportunity are also influential. Your degree can only help you to through an interview, but it’s your understanding of your field that can take you ahead. The finance and economy sector is one of the more rapidly developing areas with plenty of employment opportunities. It is a reputed sector with a number of lucrative opportunities for students and professionals today. The demand for finance recruitment is rising with time. There are many different ways of getting these financial jobs. One of the more effective methods is to opt for the assistance of a finance recruitment agency. Credit controller recruitment is a process involving different stages. Credit control positions are varied, and are based on a hierarchical scale. These are key positions as they deal with all the financial issues of the company. To get into this field, you require detailed financial knowledge and acumen. It is important to have good communication skills as well. The credit controllers should have good communication skills as they have to deal with different clients. For credit controller recruitment, you should be aware of business processes and should posses an ability to work in tandem with other departments. You should also learn to empathize with the customers and meet their expectations. There is a vast scope of promotion in this field. To qualify for credit control recruitment, you should also have the requisite skills to deal with variety of accounting software and have a thorough command of IT communications. Finance recruitment agency is the right place to look for jobs in these sectors. These job agencies serve both, the candidates who are looking for jobs and to the companies that are looking for new employees. A finance recruitment agency will help you take advantage of the right opportunity present in the market. These jobs are not easily available, as there is heavy competition. These agencies have a wide database of job opportunities which will provide you the right information. Many big companies employ the services of these agencies. You can also opt to search for these agencies online. There are many job opportunities for you to select from on the internet. You can opt for a more personalized search and seek the job according to your own terms. These platforms also allow you to share your views about the credit control recruitment online. You can access updated information on credit control on such sites. You can learn about the status of the market and changes in the industry. This will prove vital when you apply for a job. Such agencies are highly beneficial and help to find the right placement for people today.

The DC Housing Finance Agency and Its Various Help for Homeowners

The Obama administration has established a program called the Hardest Hit Fund in order to provide special attention to states with high foreclosure rate in the country. The D.C. Housing Finance Agency is the official state housing agency of Washington, D.C. The Department of Treasury allotted approximately 20 million U.S. dollars to the DCHFA to help the agency implement loan modification and home refinancing programs in their area. The DCHFA was established during the year 1979 in order to give help for homeowners and stabilize the housing market of Washington, D.C.

The Agency aims to broaden the opportunity for borrowers to achieve their American dream of homeownership. It issues mortgage revenue bonds so that the housing cost is lowered and consequently decreases the costs of home rehabilitation. Furthermore, the agency also helps developers in the acquisition, rehabilitation, and construction of communities or homes.

The various help for homeowners available in the state of Washington, D.C. are as follows:

The Housing and Economic Recovery Act- It improves the housing development in Washington, D.C and reaches out to more troubled American homeowners needing loan modifications in an attempt to ultimately combat the current foreclosure crisis in the state.
American Recovery and Reinvestment Act of 2009- Offers an expanded financial and mortgage benefits to the American unemployed workers by giving over 700 billion dollars for social welfare programs, foreclosure prevention, etc.
DC Bond Affordable Mortgage Program- Available for homebuyers with FHA mortgage. The DC Bond Program makes your monthly loan payment more affordable by providing a 30 year, fixed-rate loan with an interest rate of 4 percent.
DHCD’s Down payment and Closing Cost Assistance- Provides subsidies to low income families who want to purchase a new home. It offers financial down payment assistance for up to 10 thousand dollars to Americans who qualify for the program.

There are plenty of mortgage help available in the region, DCHFA partners with the different firms in providing loan modification opportunities to D.C homeowners. You may also look for the DCHFA’s list of community-based organizations ready to provide free counseling to troubled borrowers.

If you have any question regarding the various government help for homeowners programs, visit their office at 815 Florida Avenue, NW Washington, D.C. 20001 or call their hotline number at (202) 777-1600. Log on to you will find plenty of foreclosure resources and counseling agencies that can help you preserve your home and prevent repossession permanently.

Angie Andrews assists homeowners in trouble on her blog that specifically addresses loan modification. Take control of your own finances, discover options to modify your loan and save your home. There are government sponsored options available and you can get all the information you badly need in AllmandandLee Loan Modification Blog.

The blog is Angela’s way of providing free information about the many unknown programs available to homeowners in trouble. Her years of experience an insight help those in trouble to fully understand the loan modification process. For more specific details about mortgage assistance, federal loan modification and loan modification attorneys see Angela’s blog and find out the Secrets About Loan Mods today.

Get Mortgage Assistance From the Housing Finance Agency in California

California ranked third in the highest number of foreclosure filings among all states in the country; as a matter fact in 2009 alone, the foreclosure rate in California rose to 60 percent; that is 16 in every 100 houses! The good news is that foreclosures in the state have declined during the first quarter of 2010. However, the number is still considerably high if you base it on historical standards. To address this persisting problem, the Obama administration has agreed on a strategic plan in giving mortgage assistance to homeowners living in these five hardest hit areas.

The department of treasury allotted billions of dollars in order to extend financial help, if you need counseling on how to qualify for mortgage assistance in your area, you may go the Housing Finance Agency in California. The Housing Finance Agency is a government housing department in the state of California which aims to save houses and help homeowners afford their mortgages by providing opportunities in modifying troubled borrowers’ loans.

If you need someone to answer your foreclosure questions, you may go directly to their office and ask for the help of an HUD-certified housing counselor. That way, you do not have to spend your remaining cash on legal counseling to some private lawyer or loan modification expert. A state counselor is being paid by the government in order to answer every homeowner’s question and provide sound advice to those borrowers currently in default.

California’s Housing Finance Agency is under the supervision of the Housing and Urban Development which passes its relief plan to the U.S. Treasury Department for further approval. Currently, the agency is focusing more on providing low cost housing to families with low to moderate income. The Keep Your Home California programs were launched by the CalHFA with an objective of assisting in community revitalization and preserving the American dream of home ownership especially to troubled borrowers in the state.

Some of the agency’s missions are to: help homeowners remain in their respective homes especially when the reason of default of payment is unemployment, death of a spouse, and other uncontrolled circumstances; another is to submit strategic plans to the federal government in order to obtain funds for their citizens; and lastly, to deliver such funds more efficiently to help reduce the number of foreclosure filings in the state.

These are just some of the different mortgage assistance programs available to Californian homeowners. If you need to know more about these programs, contact the California Housing Finance Agency immediately.

Angie Andrews assists homeowners in trouble on her blog that specifically addresses loan modification. Take control of your own finances, discover options to modify your loan and save your home. There are government sponsored options available and you can get all the information you badly need in Allmand & Lee’s Loan Modification Blog.

The blog is Angie’s way of providing free information about the many unknown programs available to homeowners in trouble. Her years of experience an insight help those in trouble to fully understand the loan modification process. For more specific details about mortgage assistance, federal loan modification and loan modification attorneys see Angela’s blog and find out the Secrets About Loan Mods today.

Stakeholders and How They Affect Your Business

STAKEHOLDERS AND HOW THEY AFFECT YOUR BUSINESS

The concept ‘stakeholder’ is a variant of ‘stockholder’, which relates to ‘investors in’ or ‘owners in’ a firm or business. Stakeholders can be defined as ‘individuals and groups who are affected by the activities of an organisation. The most important stakeholders can be seen as those with most to lose from the organisation’s actions, but this does not always reflect their relative power.’. (Hannagan, T (2002), ‘Management: Concepts and Practices’ P142.) Their goals and objectives vary immensly, but all must be considered.

In the past it had been the common conception that businesses fundamentally rely upon, and in turn effect their economic capital, which is represented in the form of stockholders. The rise to prominence of stakeholders (through studies and reports) has allowed firms to realise that there are people and infrastructure beyond the company which are necessary to it and who must have their interests protected. An organisation’s stakeholders are all parties who can reasonably be understood to be affected by its decisions. They can be deemed to represent the businesses’ social and environmental capital as well as economic. Stakeholders can be of very different and varied guises and also harbour conflicting interests. In the main they can be categorised into three major groups: Internal, Connected and External Stakeholders.

Internal stakeholders include managers and employees and are those that are situated within the company and affect the ‘day-to-day’ running of the organisation. Connected stakeholders cover groups such as shareholders, suppliers and customers, and are parties which invest or have dealings with the firm. The third group, External stakeholders, are those not directly linked to the organisation but who can be influenced or influence activities of the firm through various means. External stakeholders include the Government, neighbours, pressure groups, local councils and the surrounding community.

As well as stakeholders, organisations and the people involved with them are expected to adhere to written and unwritten ethical boundaries. The degree to which these are adhered depends upon as varied a mixture as government enforced action to simply the moral fibre of a manager or employee. On occasions only the ‘eye of the beholder’ can truly acknowledge whether the moral considerations were taken on board when making a decision. This makes gauging an organisations ethical stance very difficult as the image they portray to the public may not match the internal reality. ‘The ethical environment refers to justice, respect for the law and a moral code. The conduct of an organisation, its management and employees will be measured against ethical standards by the customers, suppliers and other members of the public with whom they deal’ ( HNC / HND BTEC (2002) ‘BUSINESS COURSE BOOK: Organisations, Competition and Environment’ P267).

During the course of this study, the effect of stakeholders and ethical / moral issues on organisations will be investigated at depth using various theories and research

Stakeholders are found in all organisations, businesses or firms – from a local

grocer store to huge multinational companies such as Coca-Cola, McDonalds and Microsoft. The number of stakeholders per business will vary as will their importance and influence. The type of organisation or product / service it supplies will also determine its stakeholders. A Public Limited Corporation may have far more stakeholders than a family owned business due to its vast numbers of shareholders. As too might a Nuclear Power Station such as Sellafield which may have many more stakeholders from the environment groups (Greenpeace / ‘Save the World’ etc) / government / local residents / trade unions than a more ‘low risk’ facility or industry. However, as recent events such as the ‘Foot and Mouth Epidemic’ / BSE, and recent reports into colourings in packaged foods, it is impossible to predict when an organisation will gain new stakeholders – either of the wanted or unwanted kind.

The arrival of a new stakeholder often provides the company with an ethical dilemma of how to (or how not to) satisfy this new member’s needs, whilst avoiding conflict with the present stakeholders. In an ideal world a fine balance could be achieved to satisfy all stakeholders whilst obtaining the organisations goals in profit and sales (often profit maximisation and / or sales maximisation). However certain stakeholders may have completely conflicting measurements of success, resulting in one stakeholder being rewarded having a detrimental effect on another stakeholder.

Perhaps the main form of stakeholder approach / management is the “Stakeholder Corporation” concept. Its authors, Wheeler and Sillanpaa, argue that ‘In the future, development of loyal relationships with customers, employees, shareholders, and other stakeholders will become one of the most important determinants of commercial viability and business success. Increasing shareholders value will be best served if your company cultivates the support of all who may influence its importance’. This firmly supports the concept of ‘stakeholder symbiosis’ which believes all stakeholders are dependant upon one another when achieving success and financial well-being.

Whilst this appears an ideal scenario theory, it takes little account of conflicting stakeholders, whose personal perspectives of success may be situated at complete opposite ends of the spectrum. In a theoretical situation it may seem viable to appease all stakeholders with a fine balance of benefits and concessions, but human behaviour tends to diversify over time – with certain parties deeming themselves ‘winners’ or ‘losers’ in the scale of organisational fairness. The Premiership footballer is a prime example of a stakeholder in an organisation (club) who carries extreme power and often gets what he wants even if it has a detrimental effect. Despite his obvious privileges over other stakeholders such as fans, ground staff and the local community, he will often not be content unless his financial gains are on a par with fellow team-mates, and the finance is in the hands of this select minority. Operations and activities at the club may be designed around satisfying the present ‘high profile’ stakeholders with little consideration for the long-term effect. The fall from grace and into bankruptcy of Leeds United Football Club being the most widely publicised case.

‘Stakeholder Power: Four Gates of Engagement’ is a theory put forward by Steven Walker and Jeffrey Marr. It presents a practical framework for assessing stakeholder group commitment levels. It is their view that organisations must be proactive in their approach to relationships with potential stakeholders in order for the stakeholder to want a relationship back. In order to achieve this the framework suggests the organisation / stakeholder relationship should pass sequentially through the ‘four gates’ of Awareness, Knowledge, Admiration and Action. Each time a gate is passed, the relationship gains attributes, hopefully ultimately resulting in an Action relationship where the two strive towards multi-beneficial goals and aims. Similarly to ‘The Stakeholder Corporation’, in theory it appears common sense, but for firms with many stakeholders, as with any relationship, the more groups or individuals involved the higher the possibility of conflict. It may be viable to maintain a strong ‘Action’ relationship if the company has few stakeholders, but to keep hundreds of stakeholders happy must be at the expense of others.

Another approach to stakeholder management, described by Freeman, is to analyse to what extent an organisation has developed its Stakeholder Management Capability (SMC). Similar to the above fore-mentioned approach, SMC provides three levels in which an organisation can address its stakeholders – Level 1: The Rational Level, Level 2: The Process Level and Level 3: The Transactional Level. At the level 1 stage a company simply identifies its stakeholders and what their stakes maybe. Level 2 organisations have actually developed and applied processes or procedures to collate data and information on their stakeholders. This information is then used for decision-making. Level 3 organisations are in a position were their managers interact with stakeholders and form relationships. ‘At this highest level of SMC, the management must take the initiative in meeting stakeholders face to face and attempting to be responsive to their needs’. (Hannagan, T (2002), ‘Management: Concepts and Practices’ P87.) An organisation deemed to be in the Transactional level must be open to criticism and willing to respond if it is to keep strong relationship ties with its stakeholders. However stakeholder demands or actions which are detrimental to the company, its operations or other stakeholders must be dealt with in a strong managerial style as and when they occur.

In the case of organisations and in particular multi-national firms, it is increasingly the case that stakeholders are aware of what that company does in other countries in which it operates. Therefore concessions or benefits which have been readily agreed in one country may be demanded in another, yet cannot be afforded as easily. For years, companies such as Nike have used ‘cheap’ and sometimes ‘child’ labour to manufacture their products in countries such as China and India. Whilst extremely profitable to the company in financial terms and providing the employees in these developing countries probably a better lifestyle than they would otherwise expect, the firms ethics have been continuously called into question. Perhaps a more long-term approach would have recognised earlier the stakeholder potential of large developing countries like China, India and Malaysia.

Ethical issues between employees and management can have serious effects on a company. Unethical employment practices such as discrimination (by creed, age, sex etc), harassment (sexually, physically etc) and poor standards of health and safety can severely damage an organisations image. Poor employment relations can lead to loss of reputation, low productivity, poor morale amongst staff and heavy financial costs resulting from tribunals and compensation pay-outs. Firms, which seek to exploit cheap labour in underdeveloped countries, risk alienating both their customers and the governments in their home and host countries. An ethical and socially responsible employer should recognise that a safe working environment with pleasant conditions has a motivational effect on staff and thus increases their loyalty and commitment towards the firm in general.

Some firms have set procedures which outline the ethical responsibilities

the company has to certain stakeholder groups. The car manufacture Daimler-Chrysler has recently implemented an ‘employment pact’, thus demonstrating the importance the company places in ethical responsibility to its employees. The Daimler-Chrysler web-site quoted ‘The Daimler-Chrysler Company illustrates that companies can balance the needs of different stakeholders if alternative arrangements are put in place…They have negotiated an ‘employment pact’ which effectively guarantees 6000 jobs in their German plants until 2012, in addition to structures allowing for an increase in productivity and the long-term competitiveness of the Mercedes car group’. Taken from Daimler Chrysler’s website. By agreeing such a pact, the management of Daimler-Chrysler are removing the burden of redundancy from their employees for a set period of time, thus increasing a sense of importance, self-worth and security amongst the workers. However, a large scale slump (although unlikely) in the sales of these vehicles could see the company paying ‘idle’ workers, which would most certainly displease other stakeholders, in particular shareholders.

The main question that has arisen from my research is whether or not the theories, which have been put forward, are realistic. The various economists, researchers and theorists have suggested many models and structures which supposingly represent ‘best practice’, but in how many organisations is this actually the case or is likely to be the case in the future? International economy trends suggest that the complete opposite to an ‘ethical stakeholder economy’ may be developing. ‘The growth of multinational corporations, with their ability to move finance and production to wherever it is most profitable, has weakened the power of employees, local interest groups and even national governments’. (Sloman, John & Sutcliffe, Mark (2004) ‘Economics for Business’, 3RD Edition– Prentice Hall P286).

The expansion of multinational organisations can result in employees of very different backgrounds with few common bonds or interests. This, I feel, makes them less likely to join together to promote common beneficial goals and in extreme cases leads to employees vying against each other for a limited number of positions.

For example, the company for which I am employed has become increasingly disillusioned with the lack of employees willing to work overtime at weekends. As a result and with the aid of an agency, the company has brought several workers of Polish origin to the organisation. These employees have limited contracts, receive less remuneration and are not entitled to the normal workforce privileges of ‘time and a half’ on Saturdays and ‘double time’ on Sundays. However, the early results in terms of profitability look promising and unfulfilled customer orders are now being met. This is against an offset of varying displeasure amongst the original workforce and local community, with some employees aggrieved over the loss of overtime and potential job vacancies for local friends and family.

As highlighted above, many firms are employing larger numbers of temporary, part-time, casual and agency workers. This is part due to their high availability under the new ‘flexible labour markets’ created by the EU and government deregulation in the mid 1990’s. These workers have very little say in the way the company is run due to the ease in which they can be ‘hired and fired’. Couple this with share incentive schemes for managers (resulting in increased emphasis on profits), the present and future scenario appears one where ethical duties and less powerful stakeholders are given very little consideration or in fact their opinions dismissed!

A higher emphasis must also be placed on organisations to provide precise and honest information, particularly were it affects the public good. Extreme penalties must be inflicted on those who flaunt the truth if repeats of the Enron scandal are to be avoided. Firms cannot simply be content with providing the information the clients want to hear when the actuality is a far different scenario. Perhaps a part solution to this would be for every Public Limited Company (PLC) and Private Limited Company (Ltd) to annually be audited by an external independent accountant. This Accountant / Specialist would be given a ‘free hand’ in regards to all company figures. A confidentiality clause would be in place and only illegal or fraudulent activities would be reported.

Perception questionnaires and audits are common practice in many modern organisations as they attempt to gauge their image amongst customers. These audits, perhaps, should be more widespread to include all stakeholders and, in the case of many firms, the general public and their opinions.

Scandals such as the Enron Power Company ‘cover-up’ and similar smaller scale scandals have seriously affected public confidence like that at the telecommunications firm OneTel. Lack of public confidence can endanger key structures of our everyday lives, such as democracy and the market place. No organisation, firm or society can function to its full potential when trust is continuously being eroded by cynicism.