Abstract
The paper at hand provides a concise analysis of stakeholder management concept, its basic principles and potential challenges. One makes an attempt to summarize the insights provided by various researchers and work out the main characteristics of this type of management. Moreover, one tries to elucidate the role of various stakeholder groups in the management process and describe the impact the representatives of each group are likely to experience. Basing on the study of the collected data, one draws a conclusion that the key task of a stakeholder manager is to pursue a corporate policy that would take into consideration the peculiarities of its stakeholders’ demands so that the latter are constantly encouraged of continuing a mutually beneficial collaboration.
Introduction
Stakeholder management is a complex and complicated problem that is widely discussed by business analysts and researchers. Nowadays, the fact that successful stakeholder management is a determining factor of an efficient firm’s performance seems to be undoubted. Meanwhile, one should necessarily note that there are different opinions regarding the basic principles of this kind of management. Thus, Harrison and Wicks assume that one needs to put a particular emphasis on the four key factors that are likely to contribute to the formation of a favorable and long-lasting collaboration between a firm and stakeholders. According to the researchers, the relevant factors include four types of utility: physical, just, affiliable, and perspective (Harrison & Wicks, 2013).
In the meantime, pursuant to the suppositions of other researchers, Howitt, and McManus, the main concern of stakeholder management consists in involving stakeholders in a firm’s decision-making. Hence, the authors presume that stakeholders’ participation in this process is likely to help the managers carry out a more efficient targeting and avoid potential risks. In other words, they suppose that stakeholders’ integration in a firm’s decision-making might have a positive influence on its general performance (Howitt & McManus, 2012).
Stakeholder groups
Despite some discrepancies in the vision of the main aims of stakeholder management, most of the specialists agree on the point that firms are obliged to account for the needs of all the stakeholders groups so that the latter are willing to continue the cooperation. It is also critical to note that the management strategy should pay due consideration to the diversity of the stakeholders’ representatives. Thus, Harrison and Wicks suggest that this class is composed of customers, communities, and employees (Harrison & Wicks, 2013). Howitt and McManus, in their turn, believe that this group is significantly wider, as it includes supplier companies, particular political parties and various activist organizations (Howitt & McManus, 2012). One might, consequently, suppose that the key concern of stakeholder management is to maintain the balance between satisfying the demands of every group and promoting the interests of a firm.
Influence on employees
The analysis of various researches shows that stakeholder management has an impact on all the groups of stakeholders. Thus, one of the significant classes of stakeholders, employees, is likely to benefit considerably from a reasonable management. In accordance with Harrison and Wicks’ theory about utilities provision being the crucial concern of stakeholder management, one can assume that perspicacious managers are supposed to provide sufficient salaries, fair treatment and promising perspectives for the employees (Harrison & Wicks, 2013). Moreover, the factor of organizational affiliation also suggests that a firm’s managers should focus on creating a favorable image of their company so that the employees have a desire to associate themselves with the relevant organization, and thus have an extra motive to continue working on it.
As to communities, this type of stakeholders is also apt to receive a series of benefits from an effective stakeholder management. A professional manager is perfectly aware of the fact that a firm should be particularly careful about fulfilling the requirements of the community within which it operates. The principal options the management of a firm can offer to the community are potential workplaces and the improvement of the general environment.
Furthermore, the representatives of the local community can also be welcomed to take part in the decision-making of a firm. Pursuant to the assumptions of Howitt and McManus, stakeholder management should lay a significant emphasis on the integration of the community into the solution of the most critical problems (Howitt & McManus, 2012).
Influence on stockholders
The impact of stakeholder management on stockholders is hard to evaluate. Some specialists believe that there is a tendency to overestimate the importance of the interests of stockholders for effective management. Thus, Howitt & McManus believe that managers often tend to focus on providing the utilities required by stockholders, neglecting, in such a manner, the demands of other stakeholder groups (Howitt & McManus, 2012). Nevertheless, it is evident that affiliable and perspective utilities are particularly critical for this type of stakeholders. As a result, one might presume that a professional manager is likely to focus on these particular aspects.
Conclusion
In conclusion, one might suggest that the primary task of an employer is to perform a profound monitoring of the stakeholders the firm deals with and work out an effective strategy that would enable the company to fulfill the requirements of all the groups to the largest extent possible.
References
Harrison, J.S., & Wicks, A.C. (2013). Stakeholder Theory, Value, and Firm Performance. Business Ethics Quarterly, 23(1), 97-124.
Howitt, M., & McManus, J. (2012). Stakeholder Management: An Instrument for Decision Making. Management Services, 56(3), 29-34.