In a corporation, as defined in its first usage in a 1983 internal memorandum at the Stanford Research Institute, a stakeholder is a member of the “groups without whose support the organization would cease to exist”. Any action taken by any organization or any group might affect those people who are linked with them in the private sector. For examples these are parents, children, customers, employee satisfaction survey questionnaire pdf, employees, associates, partners, contractors, and suppliers, people that are related or located nearby.
Now as the concept takes an anthropocentric perspective, while some groups like the general public may be recognized as stakeholders others remain excluded. The definition of corporate responsibilities through a classification of stakeholders to consider has been criticised as creating a false dichotomy between the “shareholder model” and the “stakeholders model” or a false analogy of the obligations towards shareholders and other interested parties. In the last decades of the 20th century, the word “stakeholder” became more commonly used to mean a person or organization that has a legitimate interest in a project or entity. Other stakeholders would be funders and the design-and-construction team. The holders of each separate kind of interest in the entity’s affairs are called a constituency, so there may be a constituency of stockholders, a constituency of adjoining property owners, a constituency of banks the entity owes money to, and so on. In that usage, “constituent” is a synonym for “stakeholder”.
Value can best be created by trying to maximize joint outcomes. For example, according to this thinking, programs that satisfy both employees’ needs and stockholders’ wants are doubly valuable because they address two legitimate sets of stakeholders at the same time. Supporters also take issue with the preeminent role given to stockholders by many business thinkers, especially in the past. The argument is that debt holders, employees, and suppliers also make contributions and thus also take risks in creating a successful firm. The greatest value of a company is its image and brand.
By attempting to fulfill the needs and wants of many different people ranging from the local population and customers to their own employees and owners, companies can prevent damage to their image and brand, prevent losing large amounts of sales and disgruntled customers, and prevent costly legal expenses. A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization’s actions, objectives and policies. One of the central advantages of the market failures approach to business ethics is that, far from being antithetical to the spirit of capitalism, it can plausibly claim to be providing a more rigorous articulation of the central principles that structure the capitalist economy.
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