The term stakeholder is an anglicism used to refer to certain agents that form part of the company's structure, either directly or indirectly, and who have a great interest in the company successfully achieving its objectives.
In fact, the etymology of the word itself explains its meaning: Stake means interest and holder, a noun derived from the verb to hold, the one who holds. In other words, a stakeholder is someone who holds an interest. As we said, an interest in a company's success.
What are stakeholders?
They are elements, groups and people who have always formed part of the business spectrum but, with the evolution of the market, the need has arisen to name them and group them together given their importance and influence.
The market has undergone a drastic change in the 21st century due to globalisation, technology, state liberalisation, centralised state planning in industry and, among others, an increase in social awareness.
Specifically, its birth as such can be traced back to the Wharton School at Philadelphia University in the 1970s and 1980s, in the context of research aimed at revising the concepts of "strategic planning" or "business policy".
The creation of this term represents a definitive break with the traditional idea of business as a means to achieve a single end: maximising returns and capital profit. Called shareholder capitalism, a new way of understanding capitalism.
A first approach places stakeholders as a translation of four variables of the company:
- Market
- Strategy and structure of the company
- Agency relationships
- Transaction costs
However, throughout the term's history, other interpretations have been given to the word, such as that it could be the union of two other English terms that are related to this group: "stock" and "share". In fact, Milton Friedmann wrote an article to dispel any doubts about the differences between companies that focus on stockholders and those that focus on stakeholders, although other theorists believe that both views are compatible.
The stockholder-focused firm seeks to maximise its profits, while the latter is much more focused on:
- Generating excellent products and services that customers want
- Maintaining successful and strong relationships with suppliers
- Staying on the cutting edge of technology
- Having employees who are committed to their work
- Being good citizens in the community
As can be seen, there is an ethical and social interest that the capitalist stockholder lacks. Instead, taking stakeholders into account is a new way of looking at the situation whereby success and profit maximisation is achieved by managing these stakeholders in an optimal and interdependent way.
What are a company's stakeholders?
The main stakeholders can therefore be identified as follows:
- Owners and management: Depending on the distribution of the company's capital, they will be among the most interested in the company's success. They usually have the most power when it comes to decision making, but also the most capital invested and, therefore, the most to lose (and to gain). Owners, in fact, must be informed in advance of an incipient decision, to obtain their approval, even if they are not part of the company's management landscape.
- Employees: They are the first impression that the market and customers have of the company. Effective communication must be generated and their interests taken into account. It is essential to generate a sense of loyalty with them, as part of a long-term strategy. They have a vested interest in how internal actions and decisions may affect them, although they have not risked as much, nor are they as dependent on them, as investors may be.
- Suppliers: They provide the raw materials with which the company works to offer the product or service, which makes them a key player. They have an interest in the success of the company insofar as it translates into the success of their own. This relationship of interests, however, is one of the most reciprocal. The company has a clear inclination to get the best suppliers, as the final result depends in part on this.
- Customers: This is the most recurrent group when thinking about who is interested in the decisions of a company. They are directly affected by the quality of the product, the distribution model, etc. Customers are an important recipient of the actions of a business, as they will be the ones who provide the income that will be transformed into profits, although the concept of Stakeholder goes beyond this.
- Public bodies: These are the least bidirectional. The company depends to a large extent on them, on their permits, concessions and regulations. Any legislative change can cause a variation in the rhythm, organisation or structure of the company. Public bodies, however, are also interested in the actions of companies, such as in the disposal of waste or residues.
- Competitors: They have an interest in the company as they have to be mirrored, compared, outcompeted... Changes in selling price, for example, can affect their own actions, as can competition for suppliers, investors or work space.
- Lobbies: Lobbies are private groups with great power and influence, and are known as pressure groups. They carry out actions aimed at changing the course of political power: influencing its decisions, without bordering on the legal barrier.
- Media: Usually forgotten as stakeholders, they are a group of great interest above all for the company, as they export an image of it, an opinion, and are listened to and read by millions of people who belong, at the same time, to one or more of the previous stakeholders.
These elements have been classified in different ways according to different perspectives:
- Internal and external, as defined by Freeman, depending on whether they belong to the internal structure of the company, as workers, or externally as employees.
- Primary and secondary, according to Clarkson's thinking. Depending on the degree of interest and dependence on the company's success.
All these changes, which have affected the market and marketing, have led to a new perspective of study and a different paradigm, into which the stakeholders have entered. It is a new way of understanding capitalism that is born, at the same time, by the change that all these novelties cause in the structures and the business environment.
