The definitions of stakeholder are commonly considered or used in illustrating the stakeholder concept in two ways and in identifying the stakeholders in a corporation. First, they would usually indicate the nature of the connection between the organizations and stakeholders.
Second, the stakeholders can be defined through the utilization of an adjective or other qualifier or characteristics of either the organization or the stakeholder. Indicating the nature of connections between the organizations and the stakeholders is evident through the use of a verb in the definition of stakeholder.Verbs such as “affecting”, which is somehow broad, can be used. Some of the more specific verbs which can be used in determining the corporation-stakeholder relationships are “dependent”, “responsible”, “harms and benefits”, “make stakes known” and “support”. In the second definition, adjectives and qualifiers such as “achievement of the objectives” and “legitimate claims” narrow down the number of possible stakeholders.
The qualifiers would help in narrowing the scope criterion (Friedman and Miles, 2006, p. 0-11).Stakeholders have the power to affect the execution or the success of a project. First of all, stakeholders would usually have direct contact with business owners or managers in small private firms.
As such, they could affect the mission and vision of the owner or probably influence the directions of the business entity. However, in terms of larger business entities, individual stakeholders will not have much effect as to influence a large public company with regards to its goals and objectives.They can only affect the business entity if they would group together and choose or push through one option, suggestion or business plan. They are usually outvoted by big institutional investors such as pension funds, though stakeholders could threaten them by selling their shares and leaving the business entity with none. Stakeholders have commonality of interests, though there are still conflicting interests which arise in the business world.
The stakeholders, together with their employees, aim for the success of their organizations or business entity.In addition to this, they would usually aim or target a high profit that would offer them security of their jobs and also high dividends. On the other hand, the conflicting interest includes the expense of dividends in order for the wages to increase. Expense of the short term profits of a business can also be a conflicting interest especially for managers who are more interested in the growth of the organization or the business entity. The growth of the organization could result to the expense of the local community.
Moreover, the environment can also be affected by such growth of the corporation or business entity. From the definitions of a stakeholder, several types or distinctions of the stakeholder arise; they are the so-called primary and secondary stakeholders. The primary stakeholders are those stakeholders who are considered to be the most vital or very important in an organization. Furthermore, they can be considered as a group of stakeholders whose continuing participation in a certain corporation or organization would greatly help in its survival as a going concern.Whereas the secondary stakeholders are those whose continuing participation, if it stops to exist, would not totally stop a company or corporation from existing in the business world. An example of a primary stakeholder is the customer or the supplier.
On the other hand, the secondary stakeholders can be the community. The secondary stakeholders are further classified as either active or passive stakeholders. Pressure groups, managers and the employees can be considered active stakeholders.They seek out to participate or involve their selves in the activities which are set by the corporation or business. On the other hand, passive stakeholders are local communities, most shareholders and also the government that usually does not take part in the business entities’ goals and objectives.
Microsoft Corporation, an international computer technology organization, was founded to develop and sell BASIC interpreters but later on dominates the market of home computer operating systems; it has moved from the Altair 8800 to MS-DOS in the mid-1980s.The organizational structure of Microsoft Corporation has a well-structured division of labor, wherein the concepts, models and model patterns are systematized and categorized in three different points of view. In addition to this, they also categorize some structures based on their requirements. Through the well-arranged organizational structure or enterprise architecture, they achieve better efficiency and guide them to proper management of projects. The first set of the concepts used by Microsoft Corporation provides general understanding and communication and also guides the usage of specific concepts.In addition to this, the concepts are indicated whether they can be realized or if they are available.
The second set of patterns includes the practices which are considered to be the best in handing out application designs. Furthermore, these set of patterns greatly help in the reduction in the risk of project failures. This is done by making good, tested architectural models available (Platt, 2008). According to Erling S.
Andersen, the achievements of an organization are greatly influenced by its culture (2003). As such, effective stakeholder management is very important.In addition to this, stakeholder management helps create changes in the environment of business sector. It also engages the right people towards a certain goal and objective, more specifically to a right way in a project. From the results in the study of Andersen, people would tend to collaborate more especially on projects which require joint contributions. Max Messmer supports this by concluding that working collaboratively often leads to better results (2004).
As such, the role of the leaders becomes very crucial and that stakeholder management should be well enforced.
