Page 140 - Introduction to Business

114 PART 1 The Nature of Contemporary Business

Haledon, New Jersey; Friendship Ministries, Midland Park, New Jersey; and the
Waldwick Seventh Day Adventist School in Waldwick, New Jersey. Interestingly, the
bank encourages tithe recipients to maintain accounts at the bank and reports that
a majority of such recipients do so. The bank states that such account relationships
help the bank “achieve its mission of tithing.” 26

Creditors
In the spring of 2002, a major public controversy erupted regarding what, if any,
responsibilities businesses have toward individuals from whom they borrow
money. William H. Gross, the manager of the world’s largest bond fund at Pacific
Investment Management Company (PIMCO), castigated General Electric (GE) for
not disclosing enough about its operations to bond investors. Gross also
announced that for the foreseeable future PIMCO will own no GE commercial debt.
In essence, Gross argued that people who lend money to corporations are entitled
to be treated as important stakeholders. 27

Suppliers
Companies like the Coca-Cola Company view suppliers as an important stake-
holder group. Such companies manage relations with this group with care, keeping
them informed about future plans and negotiating fairly with them over prices and
delivery schedules. In some situations corporations may invest in or develop other
special financial relationships with their suppliers.
One common concern for a number of major corporations is increasing sup-
plier diversity. Nordstrom Corporation, an owner of major department stores, is
highly dedicated to supplier diversity and has developed a specific program
encouraging minority- and woman-owned suppliers.
The issue is also a highly important one for McDonald’s Corporation, which in
the United States alone operates more than 12,000 restaurants. McDonald’s sup-
plier diversity policy reads in part as follows:
McDonald’s seeks to leverage the diversity within our supplier community through
growing our existing supplier base, as well as developing new supplier relation-
ships. The more diverse our customers become, the more important it is that we
have a diverse suppliers group in order to channel wealth back into those respec-
tive communities in which we do business. 28

Suppliers are clearly a very important stakeholder for many corporations.

Distributors

Many large companies do not sell their products directly to consumers. Instead,
these products first go to distributors or middlepersons. For example, the Coca-
Cola corporation sends its product to bottlers, who then distribute it to retail out-
lets. Somewhat similarly, major auto manufacturers such as General Motors, Ford,
and DaimlerChrysler send their cars to auto dealerships throughout the country
(and indeed the world). These distributors obviously have an important stake-
holder relationship with the given corporation. For example, if General Motors
antagonizes its distributor dealerships, they might not be as enthusiastic about
selling GM cars.
Just as many companies have put forth considerable effort to increasing diver-
sity among their suppliers, many companies have also put forth considerable effort

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