Each party involved with the company, expects from the company that their interest would be taken care of. It is difficult for the management, to take care of interest of each party, keeping all claims submitted before the company. Even though management tries, with the help of strategic management, to satisfy each party. For this, following stages are followed.
(A) Clarification of claims of each claimant
(B) To understand each claims, within capacity of the company.
(C) To maintain balance among rival claims.
(D) To decide selective sequence of the satisfying of the claims.
(E) To link claims with the mission.
Study of the above stated stages are thought strategically as under.
A. Clarifications of claims of each claimant: Parties involved with the company, having their interest, are claimants. They expect that, their special interest be protected. Special interest of each party can be stated, in details, as under.
(1) Claim of shareholders: Equity holders are true owners of the company. They remain involved with the company from establishment of the company till its dissolving. Not only that they take risk of capital loss. Under the circumstance, they claim for satisfaction of following expectation before the company. (1) They should be given right of voting per share. (2) They should have right of transfer of shares. (3) Right of electing management group (4) Right of getting accounts. (5) Sharing in the profit (6) Right of getting bonus (7) Right of getting right shares (8) Right of asking questions in the meeting of the company. (9) Right of nomination of proxy (10) Right of getting share in assets of the company at last, if in case, company goes in liquidation.
In India, most of the shareholders have interest in dividend and bonus shares. Therefore, companies in India, viz. Reliance, Tata iron & steel, A.C.C., Hindustan liver, Nestle India, Cadbury India, Bajaj Auto, Glaxo India, Colgate, Nirma, Larsen & Tubro, Hindustan Motors, Co chi refinery, Wipro, M.R.F. etc. are paying considerable dividend. Not only that, some companies out of above, have issued bonus shares also. Management of these companies has made successful efforts to satisfy equity shareholders by paying higher dividend, beyond prevailing interest rates in the market, through accepting strategic angle. On account of such policy of the companies, price of the shares of the companies, in the market, have remained higher, compared to other companies. According to this shareholders have got capital gain.
(2) Claim of employees: There is a considerable increase in expectation of the employees, on account of various provisions in labour laws, education & awareness. In current employees have claims ad under. (1) Quality of working conditions should be maintained. (2) Other allowances over 7 above salary should be received. (3) Owners should follow conditions of contract of service. (4) Officers should show humanitarian behavior and should maintain self-respect. (5) Proper policy for promotion and transfer. (6) Arrangement for getting work satisfaction. (7) Independence for being member of labour union. (8) Arrangement for safety of employees. (9) Employees welfare schemes. (10) Over time wages.
Out of above stated claims, laws protect most of them now. Even though present management has accepted plans, strategically, for issue of equity shares to the employees at lower rates, for the satisfaction to the employees and their cooperation to the management. This planning is known as “ESOP” means, ” Employees Stock Option”. Moreover, officers, who have put up hard work for development of the company, planning is implemented for issue of equity shares, without any consideration in cash to them. These shares are known as “Sweet Equity Allotment” it means issue of equity against hard work for the company. Moreover, many companies have implemented various schemes, viz. providing, resident at relief rates, facility of teen, medical aids, requirement of the things for life.
(3) Consumers ‘Claims: Consumer is king in the market. Company, which does not keep them happy, cannot keep existence in the business world for long period. There is increase in awareness among clients. In current period, following claims can be noted. (1) Goods are obtained of proper qualities at fair rare. (2) Company should provide necessary parts & instruments along with its product. (3) Improvement, in product, should be made as per suggestions and complaints of the customers. (4) Company should provide credit. (5) Facility of payment in installments for high value product. (6) After sales, service. (7) Guarantee and warranty in respect of product.
In current period, management has accepted customer oriented marketing approach, keeping above stated claims of customers into account. Proper care should be taken, while increasing prize of the product in the market; even there is increase in price of materials and instrument related to the product. Efforts are made to provide product at fair rates, of proper quality, keeping control on the cost, through strategic planning of product and control.
(4) Claims of competing units: There will be competition in the business world. Competing units also have certain expectations from the company, that there may be healthy competition and to avoid improper tactics, so that units have not to suffer. These expectations can be stated as under, according to the claims of competitors. (1) To form trade union of having common interest and to be it’s member. (2) Each competing units have to follow decided code of conduct by the trade union. (3) Improper trade tactics should not be followed (4) to cooperate, while submitting common interest problems to the government. (5) To be away from separating and attracting employees of the competing units. (6) To produce internal understanding and to protect interest of each other
In current period, keeping above stated claims of competitors into account, management becomes member of the trades’ associations and Chamber of commerce. Cooperation is given for market research, to protect common interest.
(5) Claims of the suppliers: Materials suppliers to the business units, also have certain expectations. Such as, (1) Company should make payment of purchase bills in regular manner. (2) Intesest on extra period i. e. beyond credit period allowed should be paid. (3) Proper arrangement should be made for taking delivery promptly, from the carrier vehicle of the supplier. (4) For inspection of materials, prompt arrangement should be made. (5) Permanent nature of trade relations lip should be maintained.
Present management, keeping above stated claims into consideration, takes strategic steps for purchase of materials. A condition is agreed to consider increase in price, within a fixed period, so that, there may not be loss to the suppliers or there may not be any exploitation. Moreover, on the event of credit purchases, payment is made on the regular basis, or post-dated cheques are issued altogether on making purchases. Statements of due bills are sent to the suppliers of the materials.
(6) Claims of the creditors: Provider of the borrowed capital is also considered creditor of the company. Such creditors also have certain expectations from the company; their claims can be noted as (1) regular interest must be received on lended amount. (2) Lended amount should be refunded timely. (3) Before raising fresh debt, consent of creditors should be obtained. (4) Large creditors should receive report on company’s affairs.
Keeping above stated claims of creditors into consideration, management enters into contract, company versus moneylender institutions, stating therein-complete details. And ac-cordingly pays interest and principal amount regularly. It is also clarified in the contract that under what circumstances rate of interest would be changed. Company submits statement of annual accounting i. e. copy of balance sheet, along with report of meeting to the large creditors.
(7) Claims of trade unions: In each region or state, labour unions are established for protection of interest of labours. These labour unions also have certain expectations from the company Viz. (1) to recognize their labour union. (2) To invite for collective bargaining. (3) To give representation in the company. (4) To make partner in important decisions related to labours etc.
In respect of above stated claims related to labour unions, present management recognizes them Company follows provisions of Trade union laws., It creates separate funds for labour welfare. In India Trade unions, viz. Indian National Trade Union, Ahmedabad textile labour union, Akhil Bharat Mazdur Sangh, Hind Mazdur Sangh etc. have good control.
(8) Claims of tax authorities: Each business unit, working in India, has to pay-taxes on income as per provisions of laws. Not to pay taxes is stealing of tax, which becomes crime, but to reduce liabilities of taxes, by tax planning is a right. State & central government, which have made arrangement of facilities viz. road, post& telegraph, electricity, water etc. and which is used by all business units, and therefore tax authorities expect that (1) each company has to prepare trustworthy statement of accounts, and calculate taxes on it. (2) To follow accounting standards published by Institute Of Chartered Accountants, and to arrive profit accordingly. (3) To pay income tax, calculating the same as per provisions of income tax act. (4) To pay sales tax as per laws of state & central govt. (5) to pay excise duty and custom duty as per law.
(9) Claims of local society: Business unit comes into existence in the local society, and it develops with their help only, and therefore local society also has various expectations from the business unit. Viz (1) Company should take interest in social activities of the society and should give contribution to it. (2) In local area, facilities of gardens, schools, public toilets etc. should be provided. (3) Atmosphere free from pollution should be created for maintenance of health of local society.
Keeping above claims into account many companies viz. Ashima group, Torrent group, State Bank, Bank of Baroda, Birla group, Ambani, Cedilla, Bajaj, Hindustan liver etc. has taken up social welfare activities.
(10) Government Claims: Business activities should be done, within observing limitations of govt, rules, ethics and code of conduct etc. To maintain law & administration is responsibilities of the government. Therefore government has certain expectation from business unit, which can be stated as: (1) Business should follow provisions of various laws made by the government. (2) To follow strictly, consumer protection act. (3) By export activities, to earn foreign exchange for the benefit of the nation. (4) To contribute in progress of region as well nation (5) To increase employment opportunities by development planning.
In respect of above stated claims, in present period, progressive companies have taken up various developing planning. In which, Ambani group, Tata group, Birla, Bajaj group have remained ahead. These companies have made considerable increase in export business. To the angle of providing employment, many companies have created considerable opportunities.
