Business Responsibilities to Stakeholders
Stakeholders are companies or individuals that have vested interests in a particular business.
They have the right to make decision and control over the business as well as budgetary issues. Thus, it is important to know the business responsibilities to stakeholders.
Definitely, the company has responsibilities towards stakeholders in order to maintain a working and equitable balance. It is the responsibility of the business firm to ensure that the stakeholders are satisfied with the business structures and objectives. They are categorized as internal and external stakeholders.
Internal stakeholders include the shareholders, managers and employees. In this sense, the managers as the representative of the company have the responsibilities to employees. It is the responsibility of the company to ensure that the employees are fairly rewarded. They should be given equal employment opportunities, challenging work, trainings and improving career paths as well as safe and secure working environment.
On the other hand, external stakeholders include customers, clients, suppliers, creditors, government and other groups in society. In the same manner, it is the responsibility of the company to external stakeholders to ensure adopting sustainable practices, comply with the law, and develop codes of ethics as well as being socially just. Likewise, it is also the responsibility of the company to the stakeholders to ensure meeting the present needs without compromising the future generations in meeting their needs.
In addition, it is also the responsibility of the company to give assurance to their stakeholders that they can run the business profitably. Likewise, stakeholders are also expecting that the company is able to generate considerable cash flow for a long term. In this sense, the managers should have the ability to drive profitability by managing costs, increasing sales or combination. Similarly, the managers of the company should be innovative and knowledgeable about effective marketing and product positioning in order to obtain sales growth.
The stakeholders have the right to know the relevant information about the company. That is why it is the responsibility of the managers to disclose information to stakeholders in a timely manner. In this way, stakeholders can have the opportunity to develop comprehensive decision in their investments. On the other hand, it is not only good news that should be disclosed to stakeholders but also bad news as it is a way of giving respect.
Companies should follow code of ethics on how managers deal with the employees and stakeholders. It is important that the company should keep corporate values such as environmental laws. Likewise, the companies should inform stakeholders for any consultation when there are new rules to be implemented. Considering the relationship among all stakeholders should be given attention by the company. If it is not possible for the manager alone to manage the relationships among stakeholders, the company can form support structures in order to deal with them effectively. In this way, it will be easier to reconcile conflicts of interest especially on business goals.