Stakeholders are persons or groups that affect or are affected by an organization. They fulfill many roles within organizations. What is the most significant role stakeholders play in an organization? Why? How do stakeholders acting in this role influence the organizations mission, vision, and strategy?
According to Lawrence & Weber (2014), accounting for stakeholder needs leads to improved decision making. Under what circumstances might developing a relationship between an organization and its stakeholders be counterproductive to decision making? What are the most significant consequences of organizations not developing a relationship with stakeholders (consider the example of McDonalds addressing stakeholder concerns over animal welfare issues)? Why are these consequences the most significant?
In todays business environment organizations and entities have complex relationships with many people, groups, and entities. These entities are commonly called stakeholders. A stakeholder is typically described as a person, group, or organization that has direct or indirect interest in an organization. These individuals or groups can affect, or be affected by, the organizations actions, objectives, and policies. Although the act of being a stakeholder is usually self-legitimizing (those who judge themselves to be stakeholders are stakeholders), all stakeholders are not equal, and different stakeholders areentitled to different considerations. For example, a companys customers are entitled to fair business practices but they are not entitled to the same consideration as the companys employees. In other organizations key stakeholders may be the employees themselves and would be entitled to fair employment practices.
An important part of the role of a manager or business leader is to identify the firms stakeholders and understand their interests in, needs from, and involvement with the organization. Managers should also be aware of stakeholders coalitions and power, as they will need to be able to address specific stakeholder needs and use the influence of these stakeholders to the best advantage of the organization. It is critical to good business decision making for managers to be aware of the effect their decisions will have on stakeholders, along with the impact these same stakeholders will have on the organization (Lawrence & Weber,