As per Stakeholder Salience Theory, the companies should take into account all those groups that have a stake in the company. This approach was given by Donaldson and Preston in the year 1995. Later on, this same approach was used to introduce the concept of corporate social responsibility. As per Mitchell and its associates (1997) Within the stakeholder salience theory, power, legitimacy, and urgency are independent attributes of stakeholders used to define the company’s relation to these groups (Winkler 2009, p.5). The power factor defines the share of influence possessed by the stakeholder in the company. The next term is legitimacy that expresses the authenticity or legitimate position of the stakeholder in the organization. The last component is the urgency that explains the urgency faced by the management in handling different matters related to the stakeholders of the company. This component also expresses the relation of the stakeholders with the management. Using these three factors the stakeholders can be segregated as internal as well as external stakeholders. The internal stakeholders include the management and the employees of the company whereas the external stakeholders are customers, suppliers, government, society and also the environment. In the later part, the Corporate Social Responsibility policy followed by both the companies (Nokia and Ranbaxy) will be discussed.At Nokia, Corporate Social Responsibility is known as corporate responsibility. In order to make its Corporate Social Responsibility ventures more fruitful, Nokia believes in having a system where its policies regarding sustainability and similar activities are inbuilt in their operating system. It has defined its code of conduct and value system as ‘Nokia Way’ (Nokia, n.d.).It has different outlined policies for its suppliers, employees, and customers. The company works with different NGOs for improving the social condition of different nations where it has its operation.
Comparison of socially responsible business of Nokia and Ranbaxy