How do employees influence and affect the business decisions and their activities?

Abstract

Attitude data from a national sample of 2300 working adults are reported. The data show that employees feel they should have more influence on a number of decisions. This feeling is stronger for decisions affecting how their job is done, than for matters of corporate policy and personnel decisions. However, it is in the policy and personnel areas that they perceive the greatest discrepancy between the amount of influence they presently have and the amount of influence they feel they should have. Older, better educated, and higher-paid respondents felt they should have more influence on all decisions. The implications of these findings for the Quality of Work Life movement were considered. The data suggest a favourable future climate for certain types of employee influence/Quality of Work Life projects.

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By , on 17 May 2021

In the marketing world, stakeholders are the different groups of people who influence a company such as employees, suppliers, and shareholders. Even government departments or agencies can be stakeholders.

Stakeholders are fundamental to the way that companies function. Their decisions can greatly affect a company's results and objectives, and in turn, the company's activities impact them. Let's take a look at what exactly stakeholders are, what their impact is on business, and what types exist.

The definition of stakeholder was proposed in the 1980s by American philosopher, Robert Edward Freeman, and refers to the people or groups that are affected by the actions of a company.

This concept becomes important when we consider that the actions of a company not only influence its owners and workers, but also third parties such as its suppliers, competitors, customers, etc. Taking it further, we can say that the company's actions also affect the families of all these groups and, ultimately, society as a whole.

Therefore, before making strategic decisions that affect the company, we need to reflect on the impact they will have on these groups.

What Types of Stakeholders Are There?

There are many different types of stakeholders since a company's operations have an impact on a variety of individuals and groups. However, we can distinguish between primary and secondary stakeholders and also between internal and external stakeholders.

Primary and Secondary Stakeholders

This classification refers to the importance of the stakeholders for the operations of the company.

Primary stakeholders are those who are essential since they have a direct economic link with the company. Within this category, there are the following types:

• Shareholders who provide the capital necessary to start the company.

• Corporate partners who share the same profit-related interests.

• Workers who provide the labor that allows the company to put out its products and services.

• Customers who ultimately decide whether or not the business is viable.

Secondary stakeholders, on the other hand, are those who do not have a direct economic link to the company, but are affected by its activities. This category is very broad, but we could highlight the following:

• The competition: other companies that offer similar products and services.

• The market in general: companies listed on the stock exchange, but all economic activity influences the market.

• The media responsible for reporting on the company's activities, as they have interests related to transparency.

• Financial institutions that are responsible for ensuring solvency and transparency.

• Suppliers and subcontractors: their economic activity impacts the company even though they do not work for it directly.

• Political parties, religious institutions, and trade unions who have their own interests related to legality, values, and social or labor rights.

Internal and External Stakeholders

This classification is based on the relationship the stakeholders have with the company, meaning whether they are part of the company or are interested in third parties.

Internal stakeholders include owners, managers, employees, suppliers, and customers.

External stakeholders are entities such as public administration, competitors, customer advocates, environmentalists, the media, and other interest groups.

Stakeholders vs. Shareholders

Sometimes there can be some confusion between the terms "stakeholders" and "shareholders" as they not only sound similar but are also closely related.

A shareholder is a person who owns shares in a company. Therefore, shareholders are a type of stakeholder.

Shareholders are directly involved in the company and are able to influence the company's decisions since if they withdraw their support, the company cannot function.

How Do Stakeholders Impact the Company?

Not all stakeholders have the same degree of influence over a company's strategic decisions. Furthermore, not all of them benefit in the same way from the company's results.

In order to assess the impact that a specific stakeholder has on a company, two factors must be taken into account: their impact on the company's projects and the company's attitude toward them.

As we have seen above, some stakeholders have a major impact on the formation, management, and execution of a company's plans, while others have a less influential role. For example, suppliers are usually replaceable but if a public administration office does not grant a necessary license, there is usually no way forward.

Similarly, not all stakeholders are equally impacted by the company's activity. Owners, employees, and shareholders are closely linked to the success or failure of the business, while for others such as the media, the impact is much smaller.

Bear in mind that there are stakeholders who benefit from the company's good results and others who have a more antagonistic relationship. For example, shareholders would fall into the first category and competitors into the second.

Can be anyone who is influenced and affected by any decisions and actions of the company?

How does each stakeholder affect us?