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.
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