Stakeholders can be defined as an internal and external party to the organization which is having interest in the operations of the organization. Stakeholders can create an impact on the actions, objectives, and policies of the organization. Stakeholders may get affected by the objectives, policies, and actions of the business. Stakeholders may have a direct or indirect interest in the operations of the organization. Stakeholders of an organization can be of different types. These different types of stakeholders include management and employees, customers, investors and suppliers, banks and other financial organizations, government, trade unions and pressure groups (Ackermann & Eden, 2011). This essay will focus on developing knowledge of the role or importance of stakeholder management. It will also focus on the stakeholder management as a crucial factor for the management of the business operating at international level.
The term stakeholder management can be defined as the process of engaging and enrolling the stakeholders in the operations of the business so as to make them accountable, responsible, consulted and informed. Stakeholder management is concerned regarding the fit between the values or the organization and expectations of the stakeholders for determining the ability of the company to achieve the goals set. Management of the different stakeholders of the business operating at international level will result in the better execution of the operations by eliminating the risk of poor communication, negative public reactions, and unfavorable press (Hawrysz, 2014). For example, Marks and Spencer are using real-time mobile survey tool for engaging with the line workers of their factories and of their suppliers. The survey was conducted with more than 60,000 employees in five countries so as to collect feedback from the employees regarding the working conditions at the factory. Marks and Spencer have used this approach for engaging the employees in the operations by meeting their expectations (Gitman & Enright, 2015).
There is a mutual interdependence between the organization and stakeholders. Stakeholders help the organization is setting the values, mission, developing strategies, implementation of the process and enhancing the relationships. Management of the stakeholders is an essential element which helps in developing knowledge of the people who will get affected by the decision of the organization. Management of the stakeholders in an effective manner which helps in minimizing the negative impacts affecting the operations of the global business. International organizations are dealing with stakeholders who are located in different locations. It is essential for the business to develop a clear view regarding for whom products or services are offered, from where resources will be arranged and from where support will be gained for conducting the operations (Hawrysz & Hys, 2014). For example, My Starbucks Idea is engaging the creativity of the customers so as to conceptualize the new products or services and enhancing the quality of the services. This initiative was taken with a motive to enhance the participation of the customers in the operations of the business. This initiative taken by Starbucks has helped in managing the customers and their expectations in a better manner (Gitman & Enright, 2015).
The focus of the business needs to be on identification of the expectations of the stakeholders for the attainment of the objectives of the business. For conducting the operations at international level, there is a need for the stakeholders and factors affecting the expectations of the stakeholders. For enhancing the satisfaction level of the stakeholders, there is a need of communicating with the stakeholders and understanding their needs or expectations of the organizations. Impact of the different stakeholders differs from each other as it depends on the type of stakeholder (Gao & Slawinski, 2015). For example, General Electric is making use of the human resource department for integrating sustainability into the culture of the company. This initiative was taken with a motive to gain support from the employees for managing the operations of GE at the global level in an effective manner (Confino, 2014).
Organizations are using different theories for the purpose of management of the stakeholders effectively. Stakeholder theory is being used by the international organizations for meeting the expectations of the stakeholders as well as creating value for the stakeholders. Stakeholder theory helps in looking at the relationship shared between the organization and the internal and external stakeholders of the organization. This theory helps in influencing the manner in which connections of the business are affecting the activities of the business. This theory states that certain stakeholder competencies need to be developed by the organization. These competencies include making a commitment so as to monitor the interest of the stakeholders, development of strategies for dealing with the stakeholders and their concerns, segregating the interests into manageable segments and making a commitment for addressing the needs of the stakeholders (Waghmare, et. al., 2016).
Stakeholders of the organization operating at the international level are spread all around the globe and management of these stakeholders is essential. Management of these stakeholders will ensure that the performance of the organization is not getting affected. An organization operating at international level has to consider the interest of the different stakeholders spread all over the globe. Organizations operating at international level has to ensure that the interest of the different stakeholders is considered (Ng & Wyrick, 2011). For example, Coca-Cola has adopted different approaches for the management of the stakeholders and engaging the stakeholders. For engaging the consumers or customers, hotlines, local websites, research, surveys, social channels, regular visits, joint business planning, customer care centers, social media engagement, focus groups and plant tours are used by Coca-Cola. For engaging the bottling partners, joint business planning, global environment council, top-to-top senior management forum and day-to-day interactions are used. For engaging employees, engagement surveys, employee communications, individual development plans, ethics hotline, town hall meeting and senior executive business updates are used. For engaging communities, plant visits, community meetings, sponsorships, lectures at universities and partnerships on common issues are used. For engaging governments and regulatory authorities, chambers of commerce, recycling and recovery initiatives and foreign investment advisory councils are used (The Coca-Cola Company, 2017).
There are various reasons responsible hidden behind the management of the stakeholders by international organizations. These reasons include free resources, reduction and uncovering risk, increasing the perception of success and easier project closure. International organizations are involving the stakeholders in the operations or tasks of the organization by delegating the task to them. Proactive stakeholders act as an extended team and provide additional resources. Enhancing the engagement of the stakeholders can result in minimizing the risks for the business. Stakeholders can help the business in the identification of the new risks. This will help the business in eliminating the potential impact of these risks on the business and its operations. Stakeholder management approach helps in analyzing the expectations of the stakeholders. Support from the stakeholders will be gained with the help of stakeholder management approach (Maj, 2015).
Success changes of the business increase with the use of stakeholder management approach for managing the stakeholders. Management of the organization focuses on identification of the issues affecting the interest of the stakeholders. Effective management of the stakeholders of the business provides growth opportunities as well as support to the organization. With the use of stakeholder management, smoothness of the process of the organization gets increased. A sense of community is developed with the use of stakeholder management. The main objective hidden behind stakeholder management is to develop a better relationship with the different stakeholders of the business. Satisfied stakeholders provide support to the operations of the business and contribute towards the growth of the business (Matos, et. al., 2013).
There are various factors which need to be considered by the organizations operating at an international level so as to ensure that these factors are not creating an impact on the interest of stakeholders. The interest of the stakeholders is dependent on the different factors. These factors include the role of the stakeholders in the organization, the risk of losing credibility, brand considerations, desire for innovation, threats or benefits to their organization and history of commitment and associated relationships. These factors can support the interest of the stakeholders as well as negatively affecting the satisfaction level of the stakeholders of the business Wagner (Mainardes, et. al., 2012).
Thus, from the above discussion, it can be stated that stakeholders are the base for every organization on which operations of the organization are dependent on. Organizations operating at international level need to manage the stakeholders effectively so as to enhance the performance. Stakeholder management can be defined as the stakeholder relationship management by the organization for addressing the interest of the stakeholders. Impact of the operations of the organization can be seen on the interest of the stakeholders. There is a need to analyze the factors which create an impact on the interest of the stakeholders for managing the expectations of the stakeholders. These factors need to be considered for enhancing the satisfaction level of the stakeholders.
References
Ackermann F. & Eden C., 2011. Strategic Management of Stakeholders: Theory and Practice. Long Range Planning. Vol. 44. 179-196.
Confino, J., 2014. Best Practices in Sustainability: Ford, Starbucks and More. The Gaurdian. Accessed on: 07 February 2018. Available at: https://www.theguardian.com/sustainable-business/blog/best-practices-sustainability-us-corporations-ceres
Gao, J. & Slawinski, N., 2015. The Impact of Stakeholder Management on Corporate International Diversification. Business and Society Review, Vol. 120, Issue 3, pp. 409-433.
Gitman, L. & Enright, S., 2015. 16 Companies’ Breakthroughs in Stakeholder Engagement. GreenBiz. Accessed on: 07 February 2018. Available at: https://www.greenbiz.com/article/16-companies-breakthroughs-stakeholder-engagement
Hawrysz, L. & Hys, K., 2014, Communication channels of middle managers and non-managers in public sector organisations in Poland. International Journal of Contemporary Management, 13 (2), 72-85.
Hawrysz, L., 2014. Communication as a determinant of an effectiveness of the implementation of management system based on the quality. Advanced Research in Scientific Areas. Zilina, EDIS – Publishing Institution of the University of Zilina. 3(1), 41-44.
Maj, J., 2015. Diversity Management’s Stakeholders and Stakeholders Management. Proceedings of the 9th International Management Conference, Bucharest, Romania.
Matos, S. & Silvestre, Bruno S., 2013. Managing stakeholder relations when developing sustainable business models: the case of the Brazilian energy sector.(Report). Journal of Cleaner Production, 45, p.61.
Ng, E.S.W. & Wyrick, C. R., 2011. Motivational bases for managing diversity: A model of leadership commitment. Human Resources Management Review. 21. 368-376.
The Coca-Cola Company, 2017. 2016 Sustainability Report: Stakeholder Engagement. Coca-Cola Journey. Accessed on: 07 February 2018. Available at: https://www.coca-colacompany.com/stories/stakeholder-engagement
Waghmare, Y. M., Bhalerao, N. & Wagh, S.V., 2016. Analysis of the Factors Affecting the Stakeholder Management Process in Building Construction Project. International Journal of Innovative Studies in Sciences and Engineering Technology. Volume: 2 Issue: 7.
Wagner Mainardes, E., Alves, H. & Raposo, M., 2012. A model for stakeholder classification and stakeholder relationships. Management Decision, 50(10), pp.1861–1879.
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