Stakeholders are the people and groups that have an interest in your business. Traditionally, shareholders or owners have been the primary stakeholder of a business. In the early 21st century, though, other groups have become more vocally involved in holding companies to a higher social and environmental standard.
To understand the impact of stakeholders, you need to know who they are and how they relate to your business. Along with owners, customers, communities, employees, business partners and suppliers are key groups. Customers expect you to operate a business honestly and fairly while also offering a value-oriented solution. Communities expect companies to get involved and to give back. Employees expect a fair working environment. Business partners and suppliers expect you to manage your business relationships with high integrity and responsibility.
Companies are still in business to make money. However, the financial interests of your owners, partners or shareholders have been tempered a bit to create a greater balance with social responsibilities. Still, part of your role as company leader is to make wise decisions that improve revenue, minimize costs and produce a positive bottom line. The greater involvement of other stakeholders, though, has had uncertain effects on the bottom line of companies. Showing a financial return on investment from socially and environmentally responsible behaviors is difficult. It costs money to manage waste and recycling programs that are good for the environment. However, companies that do take other stakeholder interests into account understand the negative publicity that comes from unethical decision-making in the information age.
The Internet and mobile technology have given greater power to social and consumer watch groups and the public at-large. If you operate without integrity in customer marketing, sales and service, you will get called on it. Non-customer friendly actions simply don't make long-term sense in the early 21st century. Communities, a separate entity from customers, also expect you to participate in community activities and to share a bit of the wealth with the people that provide your income. One of the advantages a local business has over large chains is the connection with the community. Leave this aside and you lose that personal touch.
Employees have become a much more involved stakeholder group. In general, employees expect to be valued as a key asset and expect to be able to work in a non-discriminatory work environment. Failure to provide an equal opportunity workplace can lead to lawsuits and low employee morale. Suppliers expect to be paid on time and expect that you will keep them in the loop on important business activity that relates to their relationship with your company. As a simple example, using a supplies or resale products in a way that is bad for the environment or socially irresponsible impacts the suppliers or your partners as well.