Responsible Leadership – Michelin’s stakeholders

Michelin is a French tyre manufacturer based in Clermont-Ferrand. It is the second largest tyre
manufacturer of the world after Bridgestone. It also owns the Kléber tyres company, Uniroyal-
Goodrich Tire Company, SASCAR, Bookatable and Camso brands. Michelin is notable for its
Red and Green travel guides, its roadmaps, the Michelin stars that awarded to restaurants for
their cooking, and for its company mascot Bibendum.
Edward Freeman’s stakeholder theory specifies that the stakeholders of a firm
are almost anyone impacted by the corporate and its workings. That view is contrary to the
shareholder theory of Milton Friedman who theorized that the stakeholders a
corporation should care about are its shareholders - and thus, its bottom line. Friedman’s
opinion is that companies are made to be profitable, to satisfy their shareholders, and to have a
positive growth.
We are first going to make a typology of the stakeholders of Michelin, according to the theory
of Freeman. Then, for each stakeholder, we will focus on what their expectations of Michelin
are, and what are their interests relatively to the company.
First, we can focus on the customers of the firm. The customers of the firm are individuals and
companies. Both categories of customers expect the same thing of Michelin: good quality and
reliable tyres at a good cost. These customers wants Michelin to deliver their orders in time –
as fast as possible – and the after sales service to support them in case of problem. Their interests
are directly linked to the price and quality of the service Michelin provides. If they can buy
higher quality and cheaper tyres to a competitor of Michelin, they will.
Then, we can analyse the expectations of the employees of Michelin. They are more than
125 000 across the world (this figure includes Michelin’s subsidiaries). They have a clear
interest for the stability of their jobs. Indeed, they expect a good worklife balance and a good
quality of life at work.
Michelin has numerous suppliers. From the raw materials to the software or even the energy,
there is always a company above Michelin in the process of value creation. These suppliers
expect Michelin to pay them in time, and to keep using their services. It is in their interests that
Michelin keeps working and growing, in order to keep providing them with resources or
services.
The shareholders of Michelin have their expectations. Indeed, they took a risk investing in
Michelin and want a return on investing. Michelin is a public company. Almost anyone can
become a shareholder of Michelin. The growth and policy of Michelin can have direct impact
on the dividends the shareholders will earn every year. We assume that the shareholders want
to have a good communication with the executive team and expect transparency.
Then, we can focus on competitors of Michelin (Bridgestone, Goodyear, Continental…). Their
interests are plural. Indeed, they obviously want to be leader of their industry, but they don’t
want Michelin to bankrupt. Competition can be a good thing for all the players of an industry.
They can set prices and play on their production to maximize their profit. Thus, the competitors
of Michelin expect the company to be less productive than they are but also to be transparent
and not too aggressive in its strategy.
Environmentalist are another kind of stakeholders. Indeed, they expect a lot of Michelin’s ESR
policies. They expect that Michelin changes its processes of tyre manufacturing in order to be
more sustainable and eco-friendlier. Also, we can assume that they want Michelin – just as all
the global and big companies - to finance ecological actions.
Finally, the government is a stakeholder and has its interests and expectations. The objective
for a government is to help industry flowers to grow and shine across the world. What is more,
a government expects that Michelin saves as much jobs as possible in France when it come to
a crisis for the unemployment rates. To end with, a company like Michelin creates value inside
the country and participates to the GDP of France with its French activities.
To conclude, we can say that Michelin has a lot of different stakeholders – and not only
shareholders, as would theorise Milton Friedman. They all have different expectations and
interests, which makes the work of Michelin a lot more difficult. Since Michelin has to deal
with all its stakeholders, the company has to be very organised.