One of the key pieces during the administration of a company are the stakeholders , or also known as ‘interested parties’, since these interest groups, both internal and external, determine to a greater or lesser extent the operation and performance of the organization.
For this reason, the proper management of stakeholders has become a primary need for anyone who has the objective of turning their company into a first-rate one, since the key to success also has a strong base in the parts that make up the body. of the organization.
In this article you will find what stakeholders are, as well as the importance they have for a company, the best way to identify them, their classification and the benefits they bring to the development of an organization.
Let’s start with the basics…
What are stakeholders?
Stakeholders are the public of interest, whether individual or group of people, that influences a company , such as suppliers, employees, shareholders or, in some cases, even the Government can meet these characteristics.
It was in 1984 when the American philosopher Robert Edward Freeman created the stakeholder concept in his book Strategic Management: A Stakeholder Approach, where he defined stakeholders as all types of public that are somehow impacted by the actions of a company.
In simple words, stakeholders are all the people who make up the interested parties of any organization, while they are a fundamental part of the growth and efficiency of the company.
Likewise, it is inferred that the stakeholders make up an important part of a company, since its success or failure is never a loss only for the owners, but also affects the parties involved, such as employees, suppliers, family and clients.
Therefore, when carrying out the management of any company, the scenario must be carefully reviewed and what it means to make a decision, since the effects are never unidirectional in the management of an organization.
What is the importance of stakeholders in companies?
As the stakeholders are fundamental and key pieces for the development of a company, their presence and care is of the utmost importance, since in addition to being the group of people who are affected by the direction that a company takes, its results they are influenced by the stakeholders, forming a cycle that translates into the success of any organization.
For this reason, one of the most important objectives of the owners of a company is to take care of the stakeholders, find a way to guarantee that each of these groups that make up the body of the company are satisfied with their activities and the approach of the their demands to ensure an optimal environment.
The foregoing is essential because stakeholders have a high impact on the development and future of the organization, so the fulfillment of the objectives that are set depends not only on an adequate strategy, but also on the effective participation of each of its members. .
It is important to note that for a company to move in the right direction, its objectives and stakeholders must be aligned, so the work field of vision must include each of these groups, in order to move together towards building success.
Likewise, fostering a good relationship with stakeholders translates into sustainability and transparency, which represent unique and essential characteristics that speak well of a company, in addition to increasing commitment and trust among all stakeholders.
The importance of stakeholders is key, so it is a priority not to neglect the relationship with them in order to prevent the decisions made within the company from having a negative impact, which affects the future of the organization.
How to identify stakeholders?
Identifying the stakeholders may seem like a simple task, but it must be taken seriously in order to work on the commercial alliances that will be established based on the knowledge of all the actors that make up the development of a company.
There are essential questions that must be answered in order to easily identify the interest groups that nurture and that are affected by the decisions that are made within the organization.
Questions to know your stakeholders
The first of these is the approach to the groups or people who are affected by the direction the company is taking, that is, who are affected both positively and negatively by the choices for the future of the company.
A second important question when identifying stakeholders, after defining the people who may be affected by the decisions, is related to what their motivations or interests are within the organization.
A third key moment for this work is to know the value, influence and power that each of the stakeholders has over the company , in order to be able to develop strategies according to each particular interest group.
Finally, during the first phase of recognition and identification of the stakeholders, it is necessary to answer what are the main problems and needs of these groups , since the set of these questions will allow evaluating and analyzing the relationship that one has with each one of the stakeholders. stakeholders.
After knowing, in a first sketch, who the company’s stakeholders are, and the needs, values and influence they have, it is necessary to gather the information and, if possible, make it concrete through a map, which is known as stakeholder map.
Mapa de stakeholders
It is a very useful tool whose function is to offer clear and concise information on all the stakeholders that make up the organic body of a company.
Likewise, this map allows organizing the different interest groups according to the relationship they have with the company, a feature that has previously been identified during the first part of questions to define each of the stakeholders.
Thanks to this tool, the businessman can also know the situation in which he finds himself in relation to the relationships with each of the stakeholders, such as: employees, shareholders, suppliers, clients, among others.
An important feature of the stakeholder map is that it can be modified over time, so it is necessary to carry out constant reviews to identify possible changes in the relationships and develop an adequate management of them.
Once all the stakeholders that make up the corporate body have been identified, it is important to know the types of groups that may exist within a company, since there are different actors that coexist within the organization.
Types of stakeholders
With the above clear, it is time to talk about the types of stakeholders.
The stakeholders are divided into two large groups; the first of them is made up of internal or external ones, and the second group, of primary or secondary ones.
Internal and external stakeholders
As the first classification of stakeholders, we have those that are organized according to the close relationship they represent with the company, that is, there are those that are directly related to the organization (internal) and those that participate as third-party actors. (external).
Among the internal stakeholders we can find the following:
- business owners
- company managers
- company workers
- investors
- Suppliers
- Customers
External stakeholders are also a key part of the management of a company, although they do not belong to it. Here we find the following actors:
- Media
- The competitors
- consultants
- Government and society
- environmentalists
- Public administration
- customer advocates
The classification of the stakeholders can also be carried out by means of the order of importance or value that they have with respect to the relationship with the company, as well as the repercussion that these groups have on the functioning of the organization; They are called primary or secondary.
Primary or secondary stakeholders
The primary stakeholders are all those who represent essential figures when thinking about the development of a company, since they have a direct relationship with what happens within the company, so it is common for them to belong to it.
Among the primary stakeholders we can mention the following:
- Shareholders or shareholders
- company managers
- company employees
- Customers
- Suppliers
- corporate partners
- owners
In the case of secondary stakeholders, these are all the interest groups of the company that do not have a relationship of responsibility with the organization, but that can be indirectly affected by the decisions that are made within the management of the company.
Among the secondary stakeholders we can find the following:
- Media
- political organizations
- Competing companies
- Society in general
- The market
Knowing each of the stakeholders that make up the body of a company makes it easier to channel all common interests and align them with those of the organization, since as we have explained, the success of an organization depends, to a great extent, on the relationship with stakeholders is the best possible.
Stakeholders vs. Shareholders
Until now, the way to know what a stakeholder means seems clear, but this term is often confused with that of a shareholder. Although both sound similar, the reality is that they are two different things.
Shareholder is any person who has a direct participation within the company solely as a shareholder.
Therefore, if we have clearly followed the path, we can infer that the shareholder belongs to one of the interest groups of a company, which makes it part of the list of stakeholders that any organization that wishes to prosper economically has. in the competitive market.
The shareholder is affected in the same way by the management that is carried out within the company, so the relationship with them is also vital for its organic growth.
Likewise, an important characteristic of this interest group is that as it is a shareholder, its impact on the company is key, so its level of influence is quite high, and it is a priority relationship to avoid financial damage to the company. since if they withdraw their support, it could be the end of a venture.
Benefits of stakeholders for companies
You already know the importance of an adequate and efficient relationship with stakeholders, since their presence and participation is essential for the growth of a company, and in addition to this, they also have some important benefits, so their care and identification they are needed.
1. Empowerment
As a first benefit, we have the empowerment of interest groups, which means that by recognizing the value that stakeholders have for the future of the company, they will be taken into account for important decisions, encouraging their participation in the growth of the organization. , and making them see that they are valuable to it.
2. Sustainable change
Another of the benefits of nurturing the relationship with stakeholders translates into the commitment that they acquire when they are recognized as a valuable part of the company, which allows them to become actors in the development and sustainability of the organization.
3. Relationship building
The third benefit of the identification of stakeholders is the promotion of the construction of ties between the different interest groups of the company, which also allows, as a network, to generate more and more communication between all those who They make up the body of the organization.
4. Better company organization
Another advantage of the stakeholders is the improvement in the organizational issues of the company, which enhances its management, since it also motivates the development of corporate social responsibility.
5. Increase business success
Finally, nurturing the relationship with all the stakeholders that make up an organization helps to achieve success in the objectives that are to be achieved, since once both the goal and the interest groups are defined, it becomes easier and more efficient to reach that point.
How to effectively manage stakeholders?
After learning more about the stakeholders, it is necessary to work to improve the way of managing the different interest groups, so that the relationship with them becomes effective and efficient and the result is complete success.
For that reason, I will give you some steps that you must take for the correct management of stakeholders.
1. Identify the stakeholders
As we have pointed out, it is a very important step, since all the development that follows depends on it. By knowing your stakeholders, it is easier to start defining a strategy.
2. Create an organization in order of relevance
To improve stakeholder management, after identifying them, it is important to separate them according to their degree of importance, always trying to give priority to those who have the greatest influence on the future of a company.
3. Know and understand the needs
The problem to define at this point is to understand what the company’s stakeholders expect and what can be offered, always addressing each of the issues in order of relevance, in order to give a more immediate response to those that are most necessary. .
4. Set goals with each stakeholder
Once the needs of each interest group have been identified, organized and determined, it is important to think about a strategy to keep all stakeholders happy, so that the good relationship with them translates into efficiency for the company.
5. Maintain effective communication
The best way to build a good relationship is to opt for effective communication between the parties.
It is important that all stakeholders are aware of the plans that are being developed within the company, while being open to offering ideas to improve or streamline them.
6. Look for transparency
This point is important for stakeholder management, since being transparent with the required information creates trust among members and facilitates the work being carried out, thus motivating efficient problem solving.
7. Give space for feedback
One last key point to make stakeholder management more efficient is feedback, since this allows the exchange of ideas to always take place in dialogue, which allows a better way to be built to face the decisions that must be made in the company.
A few last words about stakeholders
Along this path we have learned what stakeholders are, how to identify them, how to manage them and the importance they have for any company and, in summary, we can understand that they are all those who have a direct or indirect relationship and who see benefited or harmed by the decisions made in the company.
For this reason, it is essential to keep all stakeholders happy and make them feel part of the path that is undertaken with the company, since its success is only guaranteed if the entire body of the organization is united and satisfied.
If you are starting or already have a business, start reviewing this information and put it into practice. Little by little you will realize that the efficient management and care of stakeholders only has a positive impact on the financial future of any company.
