Define the Importance of Stakeholders Essay

Being that stakeholders are identified as groups or individuals who are investing their interest in the general outcome or the result of the body of work in a company, it is significant for an organization to work on fulfilling the company's goals and the same time, the investors own goals. There are various theories that have been advanced to explain the significance and the different stakeholders that exist in a company or a corporation. According to the stakeholder theory, the main aim of a business is to instill values in the stakeholders that will enable the enterprise to grow and maintain sustainability for a period of time and therefore the executives must uphold and align the interests of customers, employees, suppliers, the local community in which it operates and the shareholders. Therefore, the most important stakeholder for a corporation is the customers, the employees, the shareholders, business partners like the suppliers, the local community and the regulatory authorities and the national government.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

It is important to note that the above-mentioned stakeholders contribute significantly to the operation and the management of the corporation. The customers are influential in the general sales performance of the corporation while the employees ensure that the services and products are created and delivered to the customers(Turner, McIntosh, Reid, & Buckley,2018). The suppliers ensure that the raw materials are delivered on time for the efficient production process. The shareholders are the owners of the enterprise and they provide the capital needed for the operations. The government and the regulatory bodies ensure that the corporation complies with the stipulated regulatory procedures and measures. The local communities equally influence the setup and the operation of the business entity operates based on the mutual trust built.

Ideally, all the stakeholders mentioned are dependent on each other for a successful operation and management of a corporation since they play critical roles at different levels of the company. From the Costco and Walmart companies, the most important stakeholders are the customers, supplier (business partners) and the shareholders as reflected in their financial statement reports. Even though the main objective of any corporation is to maximize profits so as to increase the shareholders wealth, this is not always the case since to sustain steady profit growth, the companies must provide quality services that meet the ever-increasing consumer's need and to achieve this, they must constantly research on the emerging trends and make the necessary adjustments lest they lose their loyal customers to the competitors (Barnett, Henriques & Husted Corregan, 2018). Employees' motivation is equally an important driver for the success of the entity. Therefore, the management should always create a balance among the various stakeholders to ensure continuity and growth of the corporation.

The most important stakeholders are clearly represented in the financial statements of the companies. For example, in both the Costco and Walmart companies, the shareholders are represented on the balance sheet as owner's equity and as shareholders and equity dividends in the income statements. The current assets on the balance sheet represent the business partners since they lease the property and the machines, equipment upon which the businesses are established(Lee,2007).

Making an analysis of Walmart's and Costco's stakeholders, what comes out clearly is that Costco's and Walmart's stakeholders are influencing the general strategic decision of the company. In understanding the general dynamic and the relationship between the business and the stakeholders, managers are supposed to identify the stakeholders and their general interest so as to satisfy their general wants.

Reference

Barnett, M. L., Henriques, I., & Husted Corregan, B. (2018). The Rise and Stall of Stakeholder Influence: How the Digital Age Limits Social Control.

Lee, K. (2007). Who are the stakeholders?.Soma, K., Nielsen, J. R., Papadopoulos, N., Polet, H., Zengin, M., Smith, C. J., ... & Piet, G. J. (2018). Stakeholder perceptions in fisheries management-Sectors with benthic impacts. Marine Policy, 92, 73-85.

Turner, M. R., McIntosh, T., Reid, S. W., & Buckley, M. R. (2018). Corporate implementation of socially controversial CSR initiatives: Implications for human resource management. Human Resource Management Review