In the corporate world, knowing how to effectively manage stakeholders is a fundamental part of any business. Despite this, many people don’t know the meaning of this word and why they are so important.
In this article, we will explain in detail what a stakeholder is, the different types, the impact they have on a company’s operations, and why it’s important to monitor them at all times.
What are stakeholders?
According to the definition created by philosopher Robert Edward Freeman, a stakeholder is any individual, group, or organization that has an interest in or is directly impacted by the decisions and results of a company or project.
These individuals or groups include: employees, customers, suppliers, investors, local communities, regulatory authorities, and any other entity that may affect or be affected by the company’s decisions.
As mentioned earlier, knowing how to effectively manage stakeholders is fundamental to the success of any business. This involves understanding and adopting strategic actions that positively meet the needs, interests, and expectations of these groups.
Therefore, before making any strategic decision, it is crucial that your company conducts a thorough analysis and clearly identifies who the stakeholders of that business are.
Types of stakeholders
There are different types of stakeholders: internal and external. Here’s how to differentiate them:
Internal
Internal stakeholders are those individuals who are present within the company environment and are part of its daily operations. For example:
- Shareholders;
- Directors;
- Managers;
- Employees;
- Partners.
External
Meanwhile, external stakeholders are those who, despite not being directly involved in daily operations, are impacted by the company’s decisions and actions. For example:
- Customers;
- Suppliers;
- Local communities;
- Government;
- NGOs;
- Investors;
- Media;
- Trade unions.
What impact do stakeholders have on a company?
It’s important to highlight that stakeholders also have a significant impact on your company’s decisions; after all, the satisfaction level of these groups or individuals directly influences the results and other aspects of your business.
Here are some of the main points that can be impacted:
- Strategic Decisions: Based on your financial results, shareholders and investors, through their votes, can directly influence strategic decision-making.
- Reputation: Through opinions and feedback regarding their personal experiences, your customers can positively or negatively impact your brand’s image or reputation.
- Productivity: The level of employee satisfaction directly affects productivity, innovation, and your company’s ability to retain talent.
- Regulation: Compliance with laws and regulations is crucial to avoid fines and legal problems that could harm or even interrupt your operations, affecting your results.
- Sustainability: NGOs and local communities can influence a company to adopt sustainable practices through conversations or demonstrations. Respecting these requests is a good way to positively impact society and improve your public image.
- Development: Business partners such as suppliers, institutions, and other companies directly affect innovation and your ability to develop new products. Investing in strategic collaborations is a good way to remain competitive in the market.
For a company to succeed in the market, a manager needs to be able to align the objectives and expectations of all its stakeholders in order to guarantee the satisfaction of all parties involved.
Approaching this management strategically is an excellent way to transform challenges into new opportunities, while simultaneously strengthening the company’s image within the market.
Why does a company need to monitor its stakeholders?
Monitoring your stakeholders is crucial for several reasons. Here are some of the main ones:
Risk Reduction
Continuously monitoring them helps you predict and even avoid potential risks in various aspects that could affect your production and results, whether financial, legal, environmental, or institutional.
Therefore, it’s important to set up a system that allows you to closely monitor feedback from your stakeholders. For example, a supplier might alert you to a problem in the supply chain before it affects your customers.
Increased Productivity
Being attentive, communicating transparently, and valuing your employees whenever possible is an excellent way to motivate them, increase team productivity, and attract new talent to your company.
Furthermore, this approach also significantly reduces your turnover rates, preventing your company from incurring unnecessary expenses related to hiring and training new employees.
Sustainable Growth
To ensure your company grows sustainably, it’s necessary to continuously monitor your customers’ expectations and satisfaction levels regarding the products or services offered.
Paying attention to these indicators allows you to adjust your strategy based on the feedback received, increasing satisfaction and loyalty. Satisfied customers tend to consume repeatedly, which is essential for the growth of any business.
Difference between Stakeholders and Shareholders
Although they share some similarities, stakeholders and shareholders have distinct purposes and roles within a company. Let’s understand the differences between them.
The term shareholders refers specifically to shareholders, that is, a group of individuals who own shares in a company, which guarantees them ownership rights and participation in profits.
The concept of stakeholders encompasses all the other interested parties we have mentioned throughout the article, such as employees, customers, suppliers, NGOs, governments, local communities, etc.
In short, shareholders are those who have a direct interest in the financial returns of a company, while stakeholders are focused on resolving political, ethical, and operational issues that affect both the financial aspects and the image of the business.
Have you learned what stakeholders are and how important they are?
We hope our article has helped you understand what stakeholders are, the different types, the role they play within a company, and how they can impact your company’s decisions.