Influences - Stakeholders

A stakeholder is any individual of firm that is influenced by the activities of the firm; or has the power to influence firm activity. Stakeholders have an interest in the firm; they are affected by what it does. Business managers should be aware of all stakeholders interests, and take a proactive stance on dealing with stakeholder issues. Managers must balance competing interests of stakeholders (compromise is necessary).

Employees:

Employees are stakeholders in that they are directly affected by the firm’s decisions / processes. They enter the workplace and devote their life energy to the business’ objectives.

Employees desire (higher) pay that reflects their contributions, to be paid on time, to be safe, to feel welcomed and valued by the organisation.

Employees have an enormous power over the success of a business; they are the face of the firm.

Customers:

Customers use the output of a firm / experience service delivery of a firm directly. They spend money in exchange for an item / service of value.

Customers desire excellent service, lower cost products / services, refunds / exchanges in case of defaults, a positive store experience, products that perform as required, and to feel valued by the firm.

Customers have great power; the business is built to satisfy their needs / wants, and must listen to them.

Society:

The community where a business operates is affected by its activities; sounds, waste products, appearance, actions of employees, safety of families.

Society desires a positive impact from business operations; local employment opportunities, local growth in other businesses (suppliers), and little interruption to harmonious community life.

Expectations of society shape the goals and actions of firms; and it can lead to court action.  

Shareholders / Owners:

The owners of the business (shareholders) are also stakeholders. Their financial wellbeing is tied to the success of the business (productivity, revenue, profit).

Shareholders desire great profitability (reduced costs of operations, higher revenue). Most large firms devote their activities to the creation of wealth for shareholders (either individual or collective through superannuation).

Shareholders can become active in their approach; driving change and forcing decision-makers (managers / directors) to change business direction / strategy.

Managers:

Managers are employees of the business; but of a unique kind that sets the direction of the firm. Managers have responsibility to shareholders, and are required to get the best out of their employees.

Managers require autonomy to set the strategic direction of the business and implement strategies to achieve them without impediment from shareholders.

Managers have enormous impact on firm success; their skill / knowledge / leadership / values can make or break a firm.

Environment:

The environment (and its human activists / supporters) desire businesses to increasingly consider the impact of business activity on local eco-system health and global carbon emissions.

The disposal of waste, the minimisation of resources use in business operations and the use of renewable materials are all concerns of the environment.

Mistreatment of the environment can lead to health issues and damage to the natural environment that sustains all life.