The Functions of Stakeholders in Your Business

In business, a stakeholder is usually an investor in your company who's action determines the out come of your business decision. 

Stakeholders don't have to be equity shareholders. They can also be your employees, who have a stake to your company success and incentive for your product to succeed. They can be business partners, who rely on your success to keep the supply chain going.   

The role of stakeholders differs between business,depending on the rules and responsibilities laid out at the founding of your company or as your business evolved over the years.

The common definition of stakeholder, however, is a person or organization with a legitimate interest

in a given situation, action or enterprise.

THE ROLES OF STAKEHOLDERS IN YOUR COMPANY  

• DECISION MAKING                                                                                                                                          The most common gathering of stakeholders in a publicly trade company is the board of directors it compromises of high ranking executives and occasional outsiders who hold large amount of equity in the company.Any of this stakeholders has the power to disrupt decision or introduces new ideas to the company, the board of director has the power to do any change in the company including the change of the CEO. They have the power to dedicate the future of the company and they involve ti all business decision. 

• DIRECT MANAGEMENT                                                                                                                                 The stakeholder can take over certain department- such as human resources or research and development- to micromanage the business and insure success. In privately owned and publicly traded companies, large investors often directly participate in business decisions on the management level.
• CORPORATE CONSCIENCE                                                                                                                        Large stakeholders are generally high profile investors, and would like to steer clear of companies that trample human right and environmental laws. They monitor your company's outsourcing activities and globalization initiatives, and may vote against any decisions if they are deemed harmful to the company's long-term goals.  
• INVESTORS                                                                                                                                                      The shareholders are large investors, who will either increase or decrease their stake according to your company financial performance. Ideally, they  act as guardian angel for every investors, poring over financial reports and pressuring management to change tactics if necessary. 
• OTHER RESPONSIBILITIES                                                                                                                            Of course, this is only a broad description of stake holders responsibilities ideally, you'll have stakeholders who care about these four issues, but more often than not, short-term profit take precedence over long-term sustainability. while stakeholders may own your company, it's easier to control your investors when tour company is privately held than publicly trade. Often times the large influx of cash from a successful IPO turns out to be a deal with the devil when your company is suddenly taken over by board of directors that ousts you. On the flip side, however, stakeholders can keep your company grounded and focused on it most profitable product and sustain your company earning growth. 

Photo courtesy by: 

Kennisland