Stakeholders

The literal meaning of a stakeholder is a party that has some sort of the specific interest in relation to anything. The term is quite used in relation to the Business. The party may be an individual person or alternatively a group and lastly it can be an organization as well. In the context of the business, it is party with an interest, particularly the financial interest in any specific organization. The activities, operations and goals with regard to the organization do have significant affect on the stakeholders.  The particular stakeholders in relation to the organization are the lenders of the loan, creditors, investors and suppliers with the prime interest of the shareholders.  In addition, directors, management and the employees are also stakeholders. Similarly, there is interest of the customers and public in general.  

Stakeholders and Their Relative Importance

All the stakeholders in relation to the organization are not equal. They vary in terms of the financial interest held in the organization as well as ranked on the basis of the importance and value addition they cause in relation to the organization. For instance, from the organizational point of view employees are very important however the customers do not enjoy such consideration level but they are subjected to the fair trading operations and practices.

Negative Impact on the Stakeholders

It is already mentioned that stakeholders are greatly influence by the organizations; the influence may be positive or alternatively negative. An illustration in relation to the negative influence of the organization on the stakeholders is the cutting costs and implementing the policy of downsizing and subsequently laying off the employees to achieve the designed goal of cost cutting. The Kraft foods were showing poor index in the profitability and consequently loosing the sustainability, competitive share. In order to support the working capital, the company decided to downsize the organization and thus cut costs. The plan was implemented in the first quarter of 2013 and about 2,500 employees were laid off. This is one example where the action of the organization impacted and affected the employees that is one of the stakeholders.

Sustainability and Stakeholders

The inclusion of the community, government in the definition and purview of the stakeholders is required and suggested by the modern theory of idea. The requirement is quite compatible with the changing objective of the organizations of the contemporary business world of today and that objective is sustainability.

Breaking Down and Categorizing the Stakeholders

Stakeholders in relation to the organization can be easily in two broad categories. One is the Internal Stakeholders and the other is the external stakeholders. Internal stakeholders are those that have direct interest embedded in the organization through the channel of the employment, investment and lastly the ownership. External Stakeholders are those stakeholders that have no direct interest in relation to the organization however they are inevitably affected and influenced by the activities of the organization and include suppliers and creditors. Similarly, all the public groups such as trade unions, customers at large are specifically included in the purview of external stakeholders.