Stakeholders Impact on the Success of Businesses

Stakeholders Impact on the Success of Businesses

A stakeholder is a person or organization with a stake in the business’s success. It could be an investor, creditor, customer, or employee. This paper will discuss how stakeholders impact the success of a business. According to Dr. Jordan Sudberg, stakeholders are the people, organizations, and assets that have a stake in the success of the business.

Stakeholders have a say in the company’s direction and can affect it in ways that may not benefit the company. The stakeholder has interests that often differ from those of the company itself.

5 Stakeholders’ Impact on the Success of Businesses 

1. Shareholders

Shareholders are the owners of the company. They have a strong financial interest in the company’s profitability and growth, and therefore they may look to maximize share value by getting dividends or a higher share price. Shareholders are an anomaly compared with other stakeholders because they have no responsibility towards other stakeholders.

2. Employees

Employees represent the company’s labor force. They make up a large part of the business’s workforce and are, therefore, integral to its success. They are also vulnerable to management for not making decisions that suit them. Management can decide to keep their salaries low because they have been employees for so long. They don’t know how else to make it in life, or they can be disinterested in their job and see themselves as employees of the company rather than working for themselves within it (this behavior is not carried out on a large scale, but very infrequently).

3. Customers

Customers are a vital part of the business and, as such, have a significant impact on the company’s success. A customer’s loyalty is also important because if they leave you, it may negatively affect your business, making them look for other companies for their needs. Some specific customers are more critical than others, such as those that provide very high profits to the business to continue making profits or those that buy large quantities of product. Customers can be managed by offering them discounts or special deals.

4. Suppliers

Suppliers are responsible for the production of a product. They are crucial to the business’ success because they make up a large part of the cost of a product. Production costs are a big part of the costs that make up the price to be paid by customers. Therefore, the suppliers can significantly impact how much money you make because if you don’t pay them enough, you will not be able to sell your products at an acceptable price to generate profit.

5. Government

The government is responsible for legislating the business. They can make it harder or easier for you to run your business by giving you tax breaks or imposing taxes on you. They also can change laws that affect your business, such as environmental laws, which could limit your ability to sell a particular product, or rules that dictate how your company is run like corporate governance which may make management more difficult.

Dr. Jordan Sudberg believes that a company’s success is heavily reliant on the decisions of its stakeholders. When considering their interests, you may change your business’ direction to maximize profits and losses to respond to your stakeholders’ concerns.