Stakeholders Influence on the Operations of a Business - Case Study Example

Stakeholders’ Influence on the Operations of a Business Stakeholders’ Influence on the Operations of a Business Dana is a retailer of hardware and home renovation products, whereby the company operates a chain of more than 20 retailers across New York City. Dana runs a mix of retail outlets, most of which feature traditionally sized hardware stores, and various specialized stores of diverse sizes and formats. Over the years, the chain stores have grown rapidly through a series of acquisitions. The company offers an enticing shopping experience to the clientele, and comprises of various departments such as paint departments and home improvement products such as decorating items. Ways of Enhancing the Company’s Social Performance Dana has a significant social fingerprint embodied by its strong social performance. The company has been able to maintain a credible industry code, which has in turn, enhanced its social performance and that of the suppliers. The excellent social performance enjoyed by the company emanates from the implementation of management systems, internal social compliance, employee involvement and communication, external verification and stakeholder engagement, as well as an ongoing training and capacity building. In enhancing corporate social performance, the business has been able to alter its corporate behaviour to produce fewer harms and more beneficial outcomes to the society. Stakeholder Groups in a Business, their Roles, and Relationships A stakeholder comprises of any individual or group with significant interests, anticipations and claims as to what a business should provide to the society, or partakes in some way in the company’s products, operations, markets, industry and outcomes. Primary stakeholders embody a direct interest in the organization and are extremely necessary to the firm’s survival. The primary stakeholders in a company include, but not limited to owners, shareholders, investors, community, clients, and employees. One of the prominent challenges that face the management of an organization is to balance the needs of both the primary and secondary stakeholders (Bryson, 2004). Secondary stakeholders such as media, trade associations, and interest groups usually have an ongoing or abiding interest in the firm, although they do not have a direct transactional contact and may not be essential to the firm’s survival. Managing stakeholder’s interests maximizes the firm’s performance. Stakeholders are critical agents of influence and change within an organization. Stakeholders Influence on the Operations of a Business The understanding of the interests and influences of both primary and secondary stakeholders is essential to the effective management of the organization. Stakeholders usually have common interests, although they sometimes bear conflicting interests. Primary stakeholders usually bear vested interests in ensuring that the organization succeeds financially and have a formal, official or contractual relationship with the organization. Primary stakeholders have a significant influence in a company. For instance, employees and investors may mount pressure on an organization’s top management, which influences the decision making process (Bryson, 2004). Ways of Encouraging Stakeholders in Forming a Coalition to aid the Company in achieving its Goals Dana works hard to understand and respond to the societal expectations of being a responsible retailer, employer, and corporate citizen. In order to achieve the set objectives, Dana must pursue a coalition between the various stakeholders. In building coalition, there are three possible levels of contact. These include communication, coordination, and collaboration between the various stakeholders. Successful stakeholder engagement demands a commitment to engage with stakeholders, listen to them, build a relationship with the stakeholders, and ultimately respond to the stakeholders concerns in a mutually beneficial way (Bryson, 2004). In order for coalitions to be successful, the coalitions must be able to attain goals and objectives that the individual stakeholders would not achieve on their own. A plan outlining the building of a coalition to help the company to achieve its goals should factor in the varying roles of the stakeholders, and should incorporate a concise vision on how the stakeholders will be involved. Stakeholder engagement mainly involves time, resources, and commitment. Hence, any coalition plan must not commence the process devoid of but-in and participation of leadership. Coalition building encompasses a series of stages. The stages include issue framing and specification, relationship or stakeholder mapping, structuring of core coalition membership, demonstrating credibility, purposeful expansion, and sustainable transformation. Benefits of Forming a Coalition A coalition between the stakeholders will be essential as it aids in addressing any outstanding situation, besides empowering the stakeholders in consolidating their interests. In addition, building a coalition is rewarding since it brings about more effective and efficient delivery of various stakeholders programs, as well as eliminating any redundant efforts. Stakeholder engagement is crucial in bringing about societal alignment. The coalition is not an end in itself, but a means to aid the building of better relationships with the societies in which the company operates, eventually resulting in enhanced business planning and performance (Caroll & Buchholtz, 2009). Coalitions are crucial when making and implementing business decisions. Furthermore, a coalition avails substantial opportunities to further align the business practices with the prevalent societal needs and expectations, as well as driving long-term sustainability and shareholder value. Building a coalition is complicated, and it may not be easy in encouraging stakeholders to form a coalition. The structuring of a coalition faces challenges such as a struggle to have concise shared goals, which may be difficult to attain. One of the challenges that face building of coalitions between the diverse stakeholders emanates from the provision and creation of leadership within the coalition. Other challenges include poor linkage within the coalition and weak organization capacity. Overcoming Challenges Associated with Forming a Coalition The principal challenges that confront the building of effective coalitions encompass building of trust and leveraging diversity. These challenges can be tackled by using lobbying and persuasion techniques. Some of the steps that might aid in overcoming the challenges occasioned by building of a coalition include encouraging a broad involvement with the interested parties and subsequently building fresh relationships. In addition, the organization management should also be comprehensive, candid, and trustworthy. The implementation should follow the issues of greatest importance and should be guided by a timely sharing of pertinent information (Caroll & Buchholtz, 2009). Conclusion The building of coalitions requires evaluation and enhancement of contact between businesses and organizations in a continuum. Businesses can derive significant benefits from forming coalitions with the stakeholders. Shared goals are often reflected in the set objectives of the coalition and are the most apparent reasons for joining coalition. Thus, in order to avoid challenges that strain the forming of coalitions, it is critical to maintain an effective communication and a shared purpose. References Bryson, J. (2004). What to do when stakeholders matter: Stakeholders identification and analysis techniques. Public Management Review 6 (1): 21-53. Caroll, A. & Buchholtz, A. (2009). Business and society: Ethics and stakeholder management. Mason, OH: South-Western Cengage Learning. Read More