How Stakeholders Influence Management Decisions
Stakeholders are people who have a vested interest, or stake, in the operation of your business. For public companies, shareholders are a key stakeholder group. However, other prominent stakeholders can influence management decisions for all types of companies. Well-rounded awareness of the impact of each type of stakeholder is critical.
Customers or clients are one of the most impacting stakeholder groups for long-term-oriented businesses. Without support from core customers, your business won't last. A primary consideration with this group is offering products and services they value. Beyond that, being open, honest and transparent in communication is important. Managers who understand that customers pay the bills are heavily influenced by this stakeholder group and give it primary value in most decisions.
Employees weren't always valued as a stakeholder group independent from the business itself. However, early 21st century organizations have to recognize the impact employee relations has. Managers who treat employees fairly typically receive greater loyalty and commitment. Managers also have to address growing workforce diversity in establishing human resources practices. To truly value employees as assets, managers must promote cultural sensitivity and non-discrimination in the workplace.
Business partners and suppliers also command some attention in the decisions made by manages. First, when you collaborate with other organizations, you need a win-win attitude to keep the interests of the other company. Additionally, any company you buy from, sell to or partner with is affected by the way you do business. Thus, if you value those relationships, your decisions need to take into account shared values with the other businesses.
In the early 21st century, communities are commonly treated as a distinct shareholder entity. Beyond customers and employees, your decisions affect people in the communities in which you operate. Managers with a well-rounded view make decisions that gain favor in communities. Ethics are key. More than that, though, involvement in local events and charitable giving programs helps you develop stability and the potential for longevity based on public support.