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As it is an aware situation, Stakeholder approach links the needs of all the entities involved in the business to achieve a common goal. It all starts with the owners, who get the financial return on the total profit. This is followed by the next big stakeholders, which include the employees, who get paid a regular salary, plus they also have a stake in the company as ‘stakeholders’ of the shares and equity in some cases. Following them are the creditors and the customers. They play a role in the latter half of the procedure. Union and community forms a small part of the stakeholder process, because the risk involved is low and depends on the situation. However, suppliers and government forms a major impact causing factor, because of the dynamic nature of the business. The suppliers affect the companies in terms of agreements that suits both the parties, and the governments undertakes the regulations in place. So, it is the management of the stakeholders in a balanced way that drives the results of the execution of an organization.
Let us now discuss the concept of Freeman defining the stakeholder approach. They define them as “those groups without whose support the organization would cease to exist”. Freeman gave two definitions of a stakeholder: “Group of people who can affect or can be affected by the achievement of the organization’s objectives” (1984) and “Those groups who are vital to the survival of the organization” (2004). Both these point towards the same concept of the management of different groups of people involved in the process of implementing a procedure or protocol. I would also like to add my personal opinion to the same. I do believe that the importance of stakeholders is important but we should not forget the driving goal of the company. The stakeholders are dependent on the company’s goals and aims, hence better we serve the stakeholder, better the implementation of the objectives.
The Stakeholder Theory | Charles Fontaine et al | https://pdfs.semanticscholar.org/606a/828294dafd62aeda92a77bd7e5d0a39af56f.pdf