What Effects Do Stakeholders Have on Your Business?
Your business has many stakeholders. This concept differs from “stockholders” because it includes anyone that can be affected by your business, not just investors. Your stakeholders include employees, vendors, the families of employees, lenders, the community and customers, to give a few examples. You must take action to create a business that will satisfy your stakeholders, because they review your decisions, change the direction of your growth and contribute to your mission.
Make decisions about quality. Stakeholders influence your decisions about quality. A customer may demand the highest quality, while an investor asks you to cut corners to save money. Suppliers make more money selling you quality products, while you could save enough money with a lower-quality product to pay the stakeholder who is your lender. You must take a good look at whether or not the products and services you are providing are the right level of quality demanded by various stakeholders, and keep these demands in mind as you make decisions about your products and services.
Ensure that your business remains reliable. Your stakeholders count on you to stay in business, make a profit and continue to satisfy their needs. You soon learn that problems with shipping, delays in making payments and even your hours of operation affect a great number of people who will be glad to speak up if you let them down.
Act fairly. Stakeholders encourage you to think about the fairness of your actions. Your stakeholders may make conflicting demands. Some may want lower prices, while others may want higher profit margins. You may have a community organization that wants you to give to a neighborhood-improvement project while a group opposed to the project wants you to withhold funds. You may not always find a way to be fair to all stakeholders, but you can explain that you attempt to be as fair as possible. For example, you can explain price hikes to your customers by telling them you try to keep prices as low as possible and still pay your rising expenses. By showing that you attempt to be fair, you acknowledge the importance of this stakeholder concern.
Demonstrate honesty in your communications. Your stakeholders affect your business by insisting on full disclosure in your communications with them. This can challenge you, because you have a right to trade secrets and privacy in conducting your business affairs. Nevertheless, the demand for honesty affects you because you must constantly weigh the importance of information and determine who should get it. In short, stakeholders keep you honest.
Prioritize your stakeholders according to their level of influence on your business. When conflicting demands arise, you can determine which ones require the greatest attention.