Nur
Natashah Binti Zainal
Universiti
Teknologi Mara, Malaysia
( e-mail: natashahzainal@gmail.coml)
Abstract:
In this article, it is explain about
the key stakeholder in a business field. Key stakeholder is individual or
organizations that affect or affected to the input and outcomes of the
business. In this article, it is explain about the type and role of the
stakeholder both internal and external. It is also explain about process on how
to identify key stakeholder. It has five processes to make sure manager
carefully on identifying the stakeholder. Business also will face different
needs of stakeholder. Therefore, in this article also explain on how to deal
with different stakeholders.
Keywords:
Key stakeholder in business, Key
stakeholder, Business, Stakeholder.
1.0
Introduction
In a term in economic, business refers
to any public or private organization that sale their product or services to
fulfill customer needs and the main objective of business is to earn profits.
According to article in website by Umar farooq (2012), business is a source to
gain wealth that depends on work, efforts and acts of people or human. In a nature
of business, as a nature of human in business field, they always want and want
more and for satisfying their needs, they works and works harder.
Characteristics of business are, production or acquisition of goods which is
every business will deals with goods (may produce, manufacture or procure) and
services, Profit which it is the basic motivation business to ensure the
survival of the business, Risk which is businessman or woman will face
uncertainty of their future of business, dealing in goods and services which is
deal with goods and services to supply to those who need it and regular dealing
which is it is important characteristic in business because business needs to
keeps restock and sells to customer regularly to continues survive.
Key stakeholder can be define as
individual or group of people who are affects or affecting directly or
indirectly to achieve the objectives and goal of the organization to run their
business. Freeman (1984). In general, the concept of stakeholder is about what
the business should be and how it should be viewed. Organization itself should
consider them as group of stakeholder and the objectives of the organization
are need to manage the importance, needs and perspective that related to their
business. Stakeholder management is considered to be fulfilled by the manager
of the firm. Manager should manage the corporation to ensure the right of
stakeholders and the participation in decision making and manager has to act as
shareholder in their business to ensure the survival of their business and to
protect long terms of the business. Friedman (2006). Stakeholder also can be
defining as groups that important for the survival and successful of the
business. Freeman (2004). In the book of Freeman (1984), he said without groups
of support, the organization will not exist and cannot survive. Examples of
stakeholders are customers, employees, business partners, competitors, local
communities, supplier and distributors, shareholder and financiers from other
than stakeholder such as creditors. Friedman (2006).
In business field they will always
face and have relation with stakeholder to run their business. Therefore, key
stakeholder is really important in a business field because to make sure their
business continues survive, there must to take care of their stakeholder that
will make sure or help to work in order to achieve the objectives and goal of
the business.
2.0 Types of key stakeholder and their
role
There are internal and external key
stakeholders. An internal stakeholder is anyone who is within the organization
that working to achieve the goal and objective of the organization such as
employees, manager and owner. An external key stakeholder is anyone who is not
within the organization but concerned about the business and affecting the
business performance such as suppliers, society, government, creditors,
shareholders and customer.
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Figure 1: Types of key stakeholder
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By: Boundless (2016)
2.1 Internal
key stakeholder:
2.1.1 Employees
It is the key stakeholder
group because an employee will contribute their labor and expertise in the
organization and it is also the link between the product or service and the
customer. Money that is invest to the employees for their selection and
training is not futile because it can lead to increased satisfaction and
competence of employees and this also will lead to good services and increase
customer satisfaction and at the end it also will lead to the growth and
success of the business organization. Boundless (2016).
2.1.2 Manager
Manager play as a main
role in the business which is manager has to set strategies of the organization
such as goal and objective, vision and mission of the business. Others than
that, manager is important to make any decision regarding to the business activities
and manager is an important person who link between shareholder, the board of
directors and their organization. Boundless (2016).
2.1.3 Owners
Owners are an individual
who hold the significant share of the organization including publicly traded organizations.
As an owner of the organization, they have responsibility to the impact of the
organization and as a main role in the strategies of the organization. Owner
often make important decision regarding internal and external stakeholder.
Boundless (2016).
2.2 External key
stakeholder:
2.2.1 Suppliers
Steven Bragg said, supplier
also known as vendor which it is an individual or organization that will
provides their products or services to others organization. Usually suppliers
consist of manufacturer or distributor.
2.2.2 Society
There are defined as
people, groups, organizations or business. Business can be affected or be
affected by society actions, objectives and policies. Examples of society
stakeholder are residents, community groups, developers, government workers,
business owners, neighborhood leaders, commission members and others. Ruth
(2016).
2.2.3 Government
Government is important in
business field to strengthen their success because government is business tax.
Government is key stakeholder because government will affected to the profit of
the business. Government also will ensure that accounting procedure, ethical
practices and legal concern are handled responsibly by business
representatives. Boundless (2016).
2.2.4 Creditors
Creditors are someone who lends
the money to the business so that they can run their business and creditor has
agreed to receive the payment later. It is as resources to the business to help
them in terms of money. Creditors will interested in business that they know
the business capable and has enough money to pay them back later. Boyu Xu
(2013).
2.2.5 Shareholders
Shareholders consist of
person, company or institution that at least has one share of company stock.
They also will get the benefits of the company profit because they are also a
company owner. They also will be affected by the loss of the business in which
they will lose the money they invested in the business. Ayton MacEachern (2017).
2.2.6 Customers
Primary purpose of
providing goods and services is to fulfill the needs of human. Understand the needs
of customers with the optimizing operations to fulfill the needs of customers
are a significant part of managing a business. Boundless (2016).
3.0
How to identify stakeholders to success in business.
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Figure 2: Process to Identify Stakeholders.
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By:
Lynda Bourne (2009)
Retrieve from: http://www.gpmfirst.com/books/stakeholder-relationship-management/measuring-stakeholder-attitude
It is important to carefully identify
your stakeholder because it has limited resources and organization cannot do
everything for everyone. To identify stakeholders, you will have large list in
a short time. If you cannot focus to the important relationships, management
and staff will be running in all direction and did not meet the requirements. Graham
Kenny (2014). So, there are five steps that can help to identify key
stakeholders in your business which are identify stakeholders, prioritize your
stakeholders, understanding and managing your stakeholders, setting goals and
identify costs of stakeholder analysis and evaluation and revision. It will
help to direct your organization energy and activities. Kennon, Howden and
Hartley (2009).
First step is identifying
stakeholders. It is a process to identifying who is involve in the business and
discuss with a team why they are important to meet the business objectives and
goal. It is important to focus to their role in the business and not just a
collection organization or the title position. This is because, individual or organizations
have different levels of power or different important to the organization and
maybe have a different relationship with various teams member. It is important
because this is to form a network and not an organization. Kennon, Howden and
Hartley (2009).
Second step is priorities your
stakeholders. It is means, give the priorities to stakeholders in term of how
critical they are in the success of these business. This is also can help in
priorities the communication and discussions with the stakeholders that will
most affect the success of a business. Important people and influential people
in business is different but it is have the same important to the success of
the business which means, important people is refers to those who have power
over the delivery of project outcomes and influential people is refers to
peoples who have power direct or indirectly in the success of the business.
Example of important peoples are, leaders, critical knowledge resources and
providers of resources and the example of influential peoples are financial
people and people that have power to the
key decision maker in the business activities. Kennon, Howden and Hartley
(2009).
Third step is understand and managing
the stakeholder. It is involve on considering such attitude of the stakeholder
to the project, attitude of the stakeholder to the team and any risk that will
associated with their involvements in the project. Then, you have to consider
on what changes required in how you involve you involve them to decrease any risk
and increase their appreciation and commitment to the project. Kennon, Howden
and Hartley (2009).
Fourth step is setting goals and
identify costs of stakeholder analysis. It is requires team to prescribe their
responsibilities to carry out communication task and to set appropriate
timelines. Kennon, Howden and Hartley (2009).
Fifth step is evaluation and revision.
This process will be carried out regularly throughout the life of the project. It
will be most beneficial when analysis about the stakeholders always updated to
identify whether there are potential for new stakeholders, changes in current
stakeholders or if perception of the project have change. Kennon, Howden and
Hartley (2009).
4.0
How to relate with different types of stakeholders
With the analysis about the key
stakeholder, manager will collect enough information about their stakeholders
to build a strong relationship without regardless of the differences between
them. For example, if manager deal with director of marketing and chief information
officer, the needs and want from them will be different. Therefore, engagement
with each must be different as well.
Stakeholder with financial concern have
to know the potential return of the business outcomes and if there is a
problem, others will support to improving operations, increase market share,
increasing production or meeting other company objectives.
Remember that company interest are
most important than individual or stakeholder interest. Therefore you must keep
each stakeholders expectations and needs in mind.
Stakeholders will respect on what the
needs of the organization if the attitude of manager of business activities are
excellent such as always be honest even when need to tell key stakeholder
something that they do not want to hear, can be predictable and reliable, stand
by their own decisions and takes accountability for mistakes. Adriennie Watt
(2010).
5.0 Conclusion
As a conclusion, stakeholder is
important to help the success of the business and because of that, manager must
carefully in identify, managing and know how to maintain the relationships with
the stakeholders. The important people that business must focus on to increase
their profit or to maintain the success of the business is not on customer only
but also to their owners, manager, employees, supplier, society, government,
creditors and shareholder. There are a lot of things that manager must control
and manage. Because of that, manager must use the process on how to identify
and manage their stakeholder for their organization carefully to make sure
their business will run well for the future of the business.
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