Stakeholder Theory are a concept in management theory that posits that the two
concepts of “stakeholder”shareholder” are actually the same thing. Essentially, a stakeholder is any person or entity that has some level of direct involvement in the company that decides to share information with others; they may not share information with the direct owner of the company.
In contrast, a “shareholder” is someone who has a direct interest in the company, such as an employee, investor, partner, or vendor. Stakeholders are generally willing to spend money on a specific project, which is a big reason why managers should try to find common interests among them rather than leading to distrust and lack of cooperation within the organization.
This is the crux of the crucial difference between the two concepts. According to several studies done by business schools, managers who are able to identify with the stakeholder community are better at motivating stakeholder relations. However, it is the investors and customers who will generally disagree with what is being proposed and will not be interested in investment, or at least not to the degree that a customer would be.
This is because they will only have an interest in how the company is operated and not the profits. Once this is established, then managers should concentrate on finding common causes and agreeing to disagree, rather than coming up with a consensus on everything and attempting to be the boss of everyone.
Of course, not all stakeholder relationships are bad and some work out quite well for both parties involved. So managers should choose their interactions with stakeholder’s according to the needs of their different relationships.
For example, if the company is about to launch a new product development, then a stakeholder may be an outside developer. If the CEO wants to meet with the outside developer to discuss upcoming product development, then they should do so without a “stakeholder” background. On the other hand, if the CEO needs a stakeholder that they can talk to about business matters, then they can invite that stakeholder to their conference room and engage them.
Customers are another category of stakeholders who may decide to become a stakeholder. It is their interest in how the company operates that is important to the company, but it is also their direct interaction with the products or services that will make them more invested in the success of the company.
However, this should not be limited to sales but is about all the employees, or even all customers. The importance of customer relationship management should not be underestimated as it will greatly improve the relationships between the customer and the company as well as the employees and the vendor.
In addition, it is important to remember that employees’ supervisors will want to see the company values communicated to everyone who works for the company.They will also want to know about the stakeholder vs shareholder company’s goals, business plan, financials, and other company values.
Of course, each individual must decide whether or not to communicate their own individual management style to everyone within the company. It is important to understand that an individual has to decide what is best for them and the overall success of the company and the needs of all stakeholder are going to change as they progress in their careers and move up the corporate ladder.
it may be difficult to manage a where different stakeholders have different ideas of what’s best for the company, the general idea is to communicate your own company goals, vision, and plans to everyone who has direct influence over them. You also need to realize that each person will need to set their own standards for the company and will need to understand that their individual beliefs and values will lead to disagreements with others.
Management theories are constantly changing and in this case we are seeing a similar concept of conflict between people within the same company because of different views of what is best for the company. This is why managers should work hard to understand the differences in viewpoints and the decisions that need to be made in order to build a company and keep everyone together and united