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The Treatment of Internal and External Stakeholders

Since any organization is a social institution, it tightly interacts with society, which usually results in mutual influence. In particular, by affecting each other, a business company can contribute to the prosperity of the public, and, simultaneously, its success significantly depends on the population’s well-being. In this context, the management is always concerned with the appropriate treatment of external and internal stakeholders to ensure steady development and growth. This paper aims at identifying external and internal stakeholders and determining their importance for the business, as well as describing organizations connected with these two types.

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Internal stakeholders belong to the company’s human assets, including the board of directors, managers, employees, and investors. That is, internal stakeholders actively participate in the company’s activities and growth and are tied to its income. In particular, owners strive for gaining maximum profit, while workers pursue earning money, promotion, or staying employed. External stakeholders go beyond an organization’s borders yet can be impacted by its actions or outcomes (Trentim, 2015). They typically comprise suppliers, contractors, governmental agencies, lawmakers, communities, customers, and even competitors. For instance, the government wants firms to pay taxes regularly and properly, whereas customers desire to receive high-quality products or services at an affordable price.

Internal stakeholders should acquire the primary priority in the treatment by organizations since they are directly interested and participate in the organizational wealth. Nevertheless, to my mind, executives are the most critical stakeholders since they are responsible for developing effective and coherent strategies, policies, and missions serving as pointers for team members in attaining success. Managers and employees also contribute to the company’s well-being by elaborating and implementing various projects and plans, but their influence is more limited (Trentim, 2015). It is worth noting that the capacity of the business to realize a particular project considerably pivots on the material resources provided by investors. In contrast, external stakeholders do not contribute to the organization directly, and their contribution can be insignificant or irregular. However, among them, the most influential stakeholders include the government and communities since the company’s image, reputation, and thus, revenue is closely linked to the relationships with these subjects and their attitudes. Conflicts with governments or communities’ wrong perceptions of the organization may undermine its stability.

A good example of a company that demonstrates effective treatment of its internal stakeholders is Poult, a famous French biscuit manufacturer, focusing on cultivating corporate entrepreneurship culture. In this regard, to actualize its intention, the top management always cares for adequate payment and training of their employees and engaging them in the decision-making process (Chebbi, 2019). Furthermore, the company recognizes workers participated in even minor improvements and has established a specific reward system to stimulate them to achieve higher goals. Finally, Poult continuously invests in new collaboration management practices to foster connections between the management and subordinates.

On the other hand, Starbucks Corporation can be an excellent example of a business that treats communities, customers, and supplies carefully and honestly. For instance, the company adheres to the practices of sustainability and corporate social responsibility. According to its C.A.F.E. system, farmers achieving appropriate scores obtain higher prices compared to those who earn a lower mark. This system allows for enhancing the working conditions of 400,000 coffee farmers and utilizing sustainable practices on over a million hectares of land (C.A.F.E. Practices, 2020). In addition, Starbucks contributes to environmental sustainability by reducing carbon emissions and wastes and conserving water.

References

C.A.F.E. Practices: Starbucks Approach to Ethically Sourcing Coffee. (2020). Starbucks Corporation.

Chebbi, H., Yahiaoui, D., Sellami, M., Papasolomou, I., & Melanthiou, Y. (2019). Focusing on internal stakeholders to enable the implementation of organizational change towards corporate entrepreneurship: A case study from France. Journal of Business Research, 119, 209-217.

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Trentim, M. H. (2015). Managing stakeholders as clients: Sponsorship, partnership, leadership, and citizenship. Project Management Institute.

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StudyCorgi. (2022, November 3). The Treatment of Internal and External Stakeholders. Retrieved from https://studycorgi.com/the-treatment-of-internal-and-external-stakeholders/

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StudyCorgi. "The Treatment of Internal and External Stakeholders." November 3, 2022. https://studycorgi.com/the-treatment-of-internal-and-external-stakeholders/.

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StudyCorgi. 2022. "The Treatment of Internal and External Stakeholders." November 3, 2022. https://studycorgi.com/the-treatment-of-internal-and-external-stakeholders/.

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StudyCorgi. (2022) 'The Treatment of Internal and External Stakeholders'. 3 November.

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