The Importance of Stakeholder value

Stakeholder approach suggests that companies should formulate and implement processes which satisfy the demands of stakeholders in order to reach the long-term success and sustainability of the companies. The stakeholders of a company may vary while the typical stakeholders are shown as the chart below.

To retain good relation with stakeholder is very challenging. Stakeholder relation is like oxygen. We breathe every day but don’t always consider we are breathing while we realise it quickly when it is damaged. For example, a firm may destroy the trust of loyal customers when they did something against the customers’ belief. The loyalty is not often easy to be rebuilt. Firms have no other way but to engage these relations. The process of engagement leads firms to be active. Firms may need guidance in several directions. While more questions appears. What to engage? Why engage? When to engage? What message we have to bring and show?

Building trust through transparency is a great way to improve relations with stakeholders nowadays as transparency is a very direct method of communication. It is not always easy to identify and recognise all the stakeholders. With information available to all the stakeholders and the access to give feedback, the companies can clarify the concern of stakeholders and make improvement accordingly.