What do we mean by various groups of stakeholders for an organization? What demands on organizational identity do certain stakeholders make?
The process of comprehending organizational identity in today’s world is a very complex procedure. For a company to be economically successful on a substantial scale, the stakeholders of the organization need to be politically, socially, and financially satisfied. According to Cheney, “The number of stakeholders or potential stakeholders has increased exponentially. With the increased numbers, corporations must justify their existence in terms of broader social, political, and environmental needs.” (p.122). This new world of globalization and innovation has significantly increased the realm and spectrum of the role of a company’s stakeholders. The overall behavior of Stakeholders greatly impacts future successes of organizations. Stakeholders more than ever are impacted organizational identity because of the constantly changing lines of communication within corporations. A decent visual example of this is depicted in the following graphic: http://www.sustainability.com/images/news/stakeholders-2-350px.gif
Organizations need to be careful of not properly pleasing respected stakeholders; however it is also detrimental for a company to let the minds of its stakeholders overpower executive leadership. This new century has brought about changes in the capitalist mindset of companies and the proper treatment of stakeholders is essential for success. According to the January 16, 2005 Business Today “It is a foregone conclusion that companies that ignore corporate responsibility towards any one or more stakeholders do so at their peril. Market forces and corporations impact people and their lives, as much if not more than government or regional and international institutions. Only those corporations that deliver value without robbing value from stakeholders have a truly sustainable business. Companies today are concerned and are being judged more by reputation, brand and corporate ethics than merely by financial considerations. In the end, nothing can be more sustaining for a business organization than when all its stakeholders enthusiastically rally around it.” More than ever stakeholder relationships are completely interwoven. With this phenomenon comes the ability for one unhappy stakeholder to have a negative domino effect on all others involved. This is why the demands of such stakeholders in matters of organizational identity are so crucial. Cheney explains, “Without powerful stakeholders granting legitimacy, contemporary organizations will have great difficulties sustaining their distinctive characteristics. (p.121). According to “ConocoPhillips” a very well-respected organization in Canada, “We believe that business is best served by listening and responding to the interests of our stakeholders. By creating and maintaining mutually beneficial relationships with our stakeholders, we are better able to develop hydrocarbons in the most socially, environmentally and economically responsible manner possible.” The wording of this message on the company’s website shows the importance of these relations. http://www.conocophillips.com/canada/stakeholder/stakeholder.asp
Almost all companies so greatly respect the opinions of various stakeholders, corporate reports are provided on a regular basis with the hope of keeping all abreast of important information, news, and changes. An example of this trend can be viewed at the following link: http://www.communityvision.org/stakeholders.html.
According to Holmes (2004) the role of certain stakeholders is often a hotly debated one. “I guess it's official: The Public Relations Society of America has finally given up trying to convince people that PR is some kind of strategic, management discipline and decided to go with the flow, acknowledging that - no matter what people like me may advocate - it's all about publicity and self-promotion. How else to explain the fact that by the time you read this, Donald Trump - Donald Trump! - will have delivered the keynote address at the PRSA's annual national conference? The PRSA could have chosen a CEO from a company that clearly understands the importance of reaching out to multiple stakeholders: Herb Kelleher of Southwest Airlines perhaps, or Howard Schultz of Starbucks. Instead, it chose a CEO whose company appears to be run for the benefit of a single stakeholder: Trump himself.” Unfortunately stakeholders have been known to negatively impact a company through behaviors that are unethical and self-serving. However there are many good corporate representations of excellent corporate stakeholders.
Sometimes, social responsibility is not enough to properly sustain stakeholder/company relations. For example, the law recently took action in Canada. According to Osler, “In an important decision released on October 29, 2004, the Supreme Court of Canada has provided direction on the duties that are owed by directors of Canadian corporations to creditors and other stakeholders. In addition, while the Peoples case did not involve claims for oppression remedies, there is no doubt that the Supreme Court's decision will significantly influence future litigation involving this statutory cause of action, particularly when it comes to claims by creditors and other corporate stakeholders who do not own securities of the corporation.” This decision will definitely influence corporate relations in the future.
The role of stakeholders in the corporate world is one of much importance as well as confusion. Inevitably, the future will bring many more challenges and obstacles to this realm of business.
Citations
Gomes, I. (2005 January). It’s the Stakeholder, Stupid! Business Today, 94.
Holmes, P. (2004, October). PRSA Perpetuating Misconceptions about PR by Asking Trump to Speak at Conference. PR Week (US), 9.
Osler, Hoskin, & Harcourt LLP (2004, November). Creditor Claims Against Corporations and Directors: Canada's Supreme Court Highlights Importance of the Oppression Remedy. Canada Mondaq Business Briefing.
