Possible organizational stakeholders are illustrated in figure5.3. Balancing the demands of these various stakeholders is, as you can well imagine, a difficult process because they often have a wide range of needs and conflicting expectations.
Possible Organizational Stakeholders
According to Earnest Dale, “the manager sees himself as an arbiter among the many interests of ‘public’ affected by the business, the stockholders, the employees, the suppliers, the local community and the customers.
It is his duty to divide the returns from the business equitably by providing a ‘fair’ return to the shareholders, ‘fair’ working conditions, and pay for the employees or ‘fair’ prices to the suppliers and customers and to make the business, in general, an asset to the local community and the nation.”
The most important social obligation of an entrepreneur is to reconcile and balance the various conflicting interests in the best possible manner. The various possible organizational stakeholders are:
Employees need the security of a job, higher wages, full employment, better conditions of work, and opportunities for self-development and promotion. They also desire their work itself to be rewarding and to contribute something good to society in general.
Management, as a part of its social responsibilities, is expected to provide for their social security, welfare, grievances settlement machinery, and sharing of excess profits.
An entrepreneur must provide a safe, fair adequate, and stable long-run rate of return and steady capital appreciation to the shareholders for their investments. It must also provide regular, accurate, and adequate information about the working of the company.
Dealings with suppliers should be based on integrity, impartiality, and courtesy. Terms and conditions regarding delivery of goods and payment of prices must be reasonably fair.
Producers may make available to the suppliers the benefits of their information and research so as to promote indigenous growth or for the improvement of the quality of their products.
In the words of Henry Ford, an entrepreneur must provide, “those goods and services which the society needs at a price which the society can afford to pay.” Entrepreneurial ventures must meet the requirements of customers of different classes, and tastes, and with different purchasing power at the right time, place, and price and in the right quality.
An entrepreneur should act as a friend and guide to the customer. He must try to protect consumers’ interests at all costs. He must guard against adulteration, poor quality, lack of service and courtesy to the consumer, misleading and dishonest advertisement, underweighting, supply of stale goods, etc.
Entrepreneurs must abide by the laws of the country in their true spirit. They must conduct their affairs as may cause the minimum possible social damage such as air or water pollution. They must help in the proper implementation of all social improvement policies adopted by the Government. They must pay taxes honestly and promptly.
Trade Associations and Competitors
An entrepreneur should develop healthy inter-business relationships with fellow entrepreneurs. He must adopt fair trade practices regarding prices, quality, terms and conditions of sale, and after-sales service.
The policy of under-cutting or restricted trade practices should be avoided. An entrepreneur must patronize business associations to ensure the development of healthy business practices.
Entrepreneurs should manage their businesses with such competence and skill that it inspires confidence and pride in the minds of the people. They must encourage democratic institutions and assist national integration. Enterprise, on the whole, should act on the ideas of social justice without discrimination of any kind.
Businesses must set high standards of morality and put in all efforts to minimize social damage. It must help in bringing about a cultural, social, and economic revolution in society and lead to the economic growth of the backward regions of the world.
FAQs About the Possible Organizational Stakeholders
What are the possible organizational stakeholders?
These are the possible organizational stakeholders: Employees 2. Stockholders 3. Suppliers 4. Customers 5. Government 6. Trade Associations and Competitors 7. Community.