Question

Write a summary of inclusivity and the impact on stakeholders in a business. (8)

Answer 1

A stakeholder is a member or a party that has an interest in a company and can either affect or be affected by the business.

Stakeholder can be internal or external.

Internal stakeholders are people whose interest in a company comes through a direct relationship such as employees, manager, owners.

External stakeholders are those people who do not directly work with a company but are affected in some way by the actions and outcomes such as suppliers, society, government, creditors, shareholders, customers.

The Role of Stakeholders in a Business

• Decision Making
• Voting
• Direct Management
• Investors
• Corporate Conscience
• Social and Environmental responsibilities

To understand the impact of stakeholders you need to know who they are and how they relate to your business. Customers expect you to operate a business honestly and fairly while offering a value-oriented solution. Communities expect companies to get involved and give back. Employees expect a fair working environment. Business partners and suppliers expect you to manage your business relationships with high integrity and responsibility.

Financial Impact :

The financial interests of your owners, partners or shareholders have been tempered a bit to create a greater balance with social responsibilities.Part of your role as company leader is to make wise decisions that improve revenue, minimize costs and produce a positive bottom line. Showing a financial return on investment from socially and environmentally responsible behavior is difficult.

Social Impact :

The Internet and mobile technology have given greater power to social and consumer watch groups and the public at large. If you operate without integrity in customer marketing, sales and service, you will get called on it. Communities, a separate entity from customers also expect you to participate in community activities and to share a bit of the wealth with the people that provide your income.

Operations Impact :

Employees have become a much more involved stakeholder group. In general, employees expect to be valued as a key asset and expect to be able to work in a non-discriminatory work environment. Failure to provide an equal opportunity workplace can lead to lawsuits and low employee morale. Suppliers expect to be paid on time and expect that you will keep them in the loop on important business activity that relates to their relationship with your company.