Stakeholders, who are they? They are in groups or people affecting the operations of your company. Shareholders are the owners of a company. The influence and impact of stakeholders on business rely on the company decisions they make, and how can stakeholders influence a business.
The influence of stakeholders confirms the success and viability of the long term. There are the key stakeholder groups customers, communities, employees, and business partners, carrying weight in the activities of the company.
Stakeholders types
Stakeholders are of two types: Internal and external. Internal stakeholders have a direct influence on business functions. The involvement is direct in case of failures or successes. The internal stakeholders are:
- Shareholders
- Owners
- Employees
External stakeholders’ involvement is with the business functioning from the outside. The external stakeholders are:
- Customers
- Bondholders
- Vendors
- Suppliers
How do stakeholders impact business activity?
Understanding the impact on the stakeholders means you must know who they are and how they relate to your business. What is their relation? Along with customers, owners, employees, communities, suppliers, and business partners are the key groups. It is an interconnected chain to know how stakeholders impact business activity.
Customers want the stakeholders to operate a business honestly, and they should be capable of providing a value-oriented solution. Suppliers and business partners expect the stakeholders to manage business relationships with responsibility and high integrity. Communities want companies to be involved and give back in return. Employees desire a fair working environment.
Impact of stakeholders on business
- Financial impact- Businesses and companies are out to make money. The financial interest of shareholders, partners, or owners is to create balance with responsibilities. As a company leader, wise decisions about reducing costs, improving revenue, and producing positive results are a must. The stakeholder’s involvement is high. Showing an ROI is difficult, keeping in balance the responsible behaviors socially and environmentally.
- Social impact- Mobile technology and the internet shower power consumers to watch everything. Non-customer-friendly actions have no meaning to sustain long term. Operating without integrity is not acceptable. Communities also anticipate the participation of the stakeholders in community activities. The advantage is the community connection.
- Operations impact- Employees are another group of stakeholders. Employees expect a non-discriminatory working environment, and they wish to be known as key assets. Any failure to give equal opportunity at the workplace will highlight low employee morale. Above all, on-time payment for suppliers so that the business activity loop continues.
Stakeholders in Business
Business growth requires continuous innovation, developing new projects, new things, and attracting stakeholders and customers. For any project, the first step revolves around determining the stakeholders of the project. It includes understanding the different roles of the stakeholders in the project, internal and external.
The impact of stakeholders on business is more on the primary stakeholders in a project. This is because they will be responsible for the project from start to end. The decision-making of the stakeholders and their inputs on the project will ensure the conclusion of the project. The stakeholder strategy is crucial for:
- Business and market growth
- Innovation
- Social responsibility
- Shareholder value
- Employee and customer loyalty
Advantages of Stakeholders
Businesses value stakeholders for the benefits they can offer the company. They have expertise in handling the workforce and the ability to make investments, ensuring long-term business growth. How stakeholders impact business activity is apparent here:
- Experience: Stakeholders are individuals with experience. They can manage and are on the board of directors. They do not interfere in day-to-day operations but plan for long-term success and avoid costly mistakes.
- Acumen: Companies attract individuals by providing guidance. The stakeholders with experience know how to deal with situations down the road, if an opportunity arises. They are beneficial and adept at handling matters delicately.
