Importance of Stakeholder Engagement in Business

Stakeholders are all those people or businesses that are essential for a company, because they contribute to keep it afloat or in operation. They can be affected if their expectations or needs are not met. There are three interested parties: suppliers, customers and investors. Each of them is an indispensable part. Without its essential contribution, the business could not be sustained or built. Suppliers provide the input, customers are those who consume our products and refer us to new prospects and investors or owners, contribute their capital for the sustainable development of the business. Stakeholders can benefit or be harmed by any action or decision taken. That is why every business or company must identify them and know their needs and expectations to fulfill them. Since above all, they are the ones that contribute in a special way to our business.

Stakeholders have increasingly become an essential component of business in the contemporary world amid heightened levels of competition and changing business landscape emphasizing on matters such as sustainability of business operations. Primarily they constitute of individuals and entities that are affected by a company’s operations either directly or indirectly hence their inputs can positively impact on an entity’s success. Usually, people who participate in decision making that affect their welfare have a higher degree of ownership and commitment thus listening and engaging those affected by a company’s operations can significantly impact on its continuity into the future due to high levels of accomplishment attainable.

Good stakeholders engagement has for many years been a rare practice partly due to the belief among many investors and organizations that it would take too much time and resources to accomplish. Due to the existence of such circumstance companies have traditionally focused on a narrow group of stakeholders who mainly constitute of shareholders, employees, customers, and regulators who are categorized as the primary stakeholders. Precisely organizational leaders deem this group of stakeholders as worth their time and monetary resources due to the impact they have on the company’s financial well-being. There is a strong cost-benefit case for stakeholder engagement, regardless of their impact to an entity’s financial transactions.

To illustrate, Amazon an American based electronic commerce and cloud computing company that was founded by Jeff Bezos in 1994 is the largest online retailer in market capitalization and revenue parameters. The tech giant, which initially began as an online bookstore diversified to become one of the largest virtual shopping platforms with a broad product portfolio offering. The corporation which has become one of the most successful ventures in the 21st century also produces consumer electronics and cloud services and is the world’s largest provider of cloud infrastructure services. Amazon has since inception been purely an e-commerce company in its respective business but has harnessed its brick and mortar presence by an acquisition of Whole Foods Market which was effected in 2017. Like any other entity, Amazon has numerous stakeholders who are affected by its activities. The corporation can espouse distinct mechanisms to get the interest of stakeholder on the business progress. Ideally to get the interest of stakeholder on whether Amazon’s business is falling or progressing the company can espouse distinct steps to ensure effective management of the interested parties. The first step would be for the company to identify its stakeholders by evaluating persons and entities that have a role in the organization’s activities or will be impacted by its operations. Under this phase, Amazon would assess the expectations of the interested parties and analyze the level of influence and interest that each party bears. Secondly, Amazon would develop communication strategies which will involve implementing a preferable method of communication for different stakeholder groups. Besides, it would be appropriate for the company to create a communication schedule to stay engaged with participants. Lastly would be for Amazon to hold regular informational and educational meetings for the stakeholder and particularly the high priority participants where they will be informed of the company’s progress, granted an opportunity to voice their concerns and share their ideas.

Other motivation could the continuous improvement. The continuous improvement has been a fundamental pillar for the development and evolution of what is now known as total quality, about which the continuous improvement was oriented towards the constant reduction of the variability of the processes, since this factor was considered as the main cause of the problems related to the lack of quality in those times in which standardization began to be the platform for the takeoff of the industry. Continuous improvement is achieved through all the daily actions that allow processes and companies to be more competitive in customer satisfaction. The speed of change will depend on the number of improvement actions carried out day by day and the effectiveness with which they are made, so it is important that the continuous improvement is an idea completely internalized in the behavior of all members of the organization, becoming a philosophy of work and life.

However, improving is not just a matter of good wishes and intentions. People have to be convinced of the benefit they will individually obtain by adopting the philosophy of continuous improvement, while the organization has the responsibility of providing motivation for that purpose, as well as standardized procedures and appropriate analysis techniques so that they can materialize and guide correctly your desire for improvement.

When we talk about continuous improvement it is necessary to define what we want to improve. All companies are created with some purpose or a set of purposes, and to measure whether they are achieving this, senior management uses performance indicators. These indicators measure the performance of the company as a whole, or of the different divisions or departments that compose it.

In essence, stakeholders make valuable contributions to an entity with their level of engagement being dependent on the specific role they play within a corporation. Keeping the stakeholders motivated, potentially boosts productivity and profitability of an entity. Mainly motivation plays a critical role for the stakeholders who play an active role in the company due to their direct contribution to a firm’s operations. Communication is one of the ways that a company can espouse to get the stakeholders involved and increase the potential of their stay with the company. By doing so, the company will comprehend the stakeholders’ point of view on distinct matters and find common ground making them desire to stay with the entity. The next motivational technique would be espousing an open door policy to enable stakeholders to feel confident about their inputs in the company.

In principle, Amazon can adopt various measures to engage stakeholders to want to be part of it. The first way that Amazon would make stakeholder wish to stay with them would be to create a participant focus group which would be an excellent platform for the company to provide quality information to make them feel have been involved and listened to. Next way would be the use of questionnaires which would enable Amazon to gather feedback and collect crucial data regarding various organizational matters. This method would be suitable when the number of the participant is involved. The last method that Amazon could use would be stakeholder interviews which would be an effective technique to gather information when a small number of participants are involved. The deployment of the above technique would make valuable contributions to the decision making process since it would have drawn multi-perspective inputs and would harness the commitment of the participants.

Stakeholders can break or make the success of an enterprise due to the immense contribution they make to an entity. Every participant is a very critical and sensitive issue to an organization since they affect the working of a corporation. The human being as a leader must know his own being, and subsequently meet each individual that integrates a work team; to implement the strategies of the organizations in which they must take into account the total resources, including personnel.

A fundamental part of the success of some companies known as outstanding or that persist in time, lies in leaders and qualified and committed people, if not thus, and when identifying weak points not in accordance with the strategic plan, it is necessary to choose the changes and adjustments required to guarantee the proposed achievement. In companies with a traditional culture, it is difficult to find committed leaders and focused on achieving results, as well as the work team, since they tend to be organizations that depend on external factors, where they are not assertively evaluated profiles and competence of the staff, therefore these organizations are maintained thanks to external agents, such as political, economic, bureaucracy; but not because of the real management and leadership of the company.

Business leaders must, therefore, keep stakeholder’s interest in the business. Some of the recommendable methods of enhancing this cause include identifying and acknowledging the stakeholders, engaging them on a continual basis and creating a strategic plan for effective stakeholder management. The leader as the main axis of the organization should tend that both the team of work as the processes of the company are interrelated, thus guaranteeing the based approach in processes, to optimize resources, and contribute to total quality, where the main objective is to generate a differential product that meets the expectations of customers well be it internal or external.

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