What is a stakeholder?
Stakeholders are all institutions, people or groups of people who are directly or indirectly affected by the business activities of a company. They either have an interest in these company activities or they want to influence them. But what do stakeholders mean for the company?
Importance of stakeholders for a company
The various stakeholders of a company pursue their own interests in relation to the company's activities and exert influence on them accordingly. They try in different ways to influence the actions of the company and the activities of the management. Conversely, however, they are also influenced by the activities of the company. So there is a certain interaction between companies and stakeholders, where both sides act and react.
It is therefore very important for a company to know who these people and institutions are, what their interests are various stakeholders, what requirements or expectations they have and what significance they have for the company have business success.
Stakeholders versus Shareholders
Shareholders are the shareholders, owners or financiers of a company. They represent interests and have expectations of the company, which are primarily intended to increase the company's value. In contrast, stakeholders are all institutions, people or groups of people who are affected by the company's activities or who want to influence them. In addition to the shareholders, this can also involve a wide range of other actors, such as e.g.:
- Company employees.
- Customers
- suppliers
- trading partner
- public administration
- politics and legislators
- Consumer protection associations and other associations
It sounds like an easy question, but when you think about it, it's not even...
Consequences of disregarding stakeholder expectations
In the event that a company disregards the expectations of its stakeholders and fails in the general company strategy, this can have far-reaching consequences for the company's success have. Some examples of this can be:
- Legislative requirements are disregarded and investments already made by the company are lost.
- Customer complaints are ignored, customers buy from the competition and publicly warn against the company.
- Employees are treated badly by management, leading to bad press and a bad public image.
- The company works with foreign suppliers who allow child labor or cause serious environmental damage. The consequences are damage to your image due to very negative press or customers leaving.
- Consumer protection organizations rate the company's products as "poor", which leads to a decline in sales figures.
Disregarding stakeholder interests can therefore have numerous negative consequences for a company, which in addition to a Damage to reputation can also result in a slump in sales and a brain drain of qualified employees and customers can.
It can also become critical if a company does not adequately fulfill the legal framework. These often leave room for interpretation. It then depends on how a company interprets and fulfills these framework conditions, which can always lead to reactions from certain stakeholders.
The various groups of stakeholders interact with a company. They influence the company's activities and they have requirements and expectations. In the event that a company does not adequately protect the interests of its stakeholders Taking corporate strategy and corporate activities into account, this can have far-reaching consequences for the have business success.
