10 Different Types of Stakeholders
The owners of any business are the first set of stakeholders. They contribute capital or equity and have a say in the running of the business. They may be a few as in the case of a partnership, or very large in number, as in the case of a joint stock company.
Persons having a share in the equity of a company are known as shareholders. Owners expect the business to run smoothly and efficiently and yield good return on equity. Such shareholders would be different from the company, which by itself will be a separate legal entity.
Communication between the owners themselves, and also between the company and the shareholders, therefore, assumes relevance.
The next group of stakeholders in any business is its employees. These employees may be of any cadre and may carry out managerial, supervisory or other functions. They draw remuneration for the contribution they make to the functioning of the company or business.
Nowadays such employees also own a share in the company, which further enhances their stake in the business. Employees generally expect reasonable reward and incentive systems, career progression and job satisfaction.
In large organizations and businesses, the number of such employees is very large and they are spread out across numerous regions and functions. The process of communication will have to effectively reach all of them.
Business exists for the sake of its customers. It is the customers who keep the business going. Customers obtain their products and services from the business establishments, and as such are interested in their progress.
In that sense, for every business organization, customers are an important group of stakeholders. Business organizations make conscious efforts to relate to customers and meet their needs and expectations.
Customers expect the business to provide efficient and high-quality products and services. In general, meeting the customers’ needs is an extremely important area of concern for ensuring the success of any business.
The community within which a business operates can be considered as another set of stakeholders. Good organizations and sound businesses are considered an asset to any community. Besides meeting the expectations of the other categories of stakeholders, these organizations often contribute in terms of various welfare programs.
They maintain gardens, parks and fountains, establish schools and temples, run orphanages and old age homes, and generally take up activities for the good of the community. Communication between the business organization and the community, of which it is a part, also assumes significance.
5. Communication Needs of Any Business Organization:
There are people and agencies beyond the stakeholders, and an organization or a business will have to communicate with all those sections of people on an ongoing basis for a variety of reasons. The dimensions of business communication would therefore cover the following:
The process of communication should, as we have already discussed, effectively cover all the stakeholders, viz., owners, employees, customers and the community. Employees and customers are particularly relevant in any organization and a wide variety of methods, types, channels and strategies will have to be adopted to effectively address their communication needs.
Every business, in some way or the other, comes within the ambit of government agencies. These government agencies may be national or central, provincial or state, or even local in nature. Quite often, every business will have to comply with various governmental rules and regulations.
Inadequate compliance and reporting could result in penalties and other problems. Every business has to respect the law of the land. Communication between any business organization and the government has to be recognized.
7. Trade Organizations:
Every business generally has certain affiliations or memberships with a trade organization or an association. It may be functional or geographical in nature. Such organizations generally work with the larger interests of the profession or its members in mind. Communication with this segment becomes necessary.
There may be various players who operate in the market. There are often occasions for them to communicate with each other. Notwithstanding the competitive nature, different players may arrive at some understanding to respond to the customers.
There may even be occasions when there is a clash of interest that needs to be sorted out. For different reasons, a business organization may have to communicate with its competitors and other operators in the market.
9. Press and Media:
Businesses also often face the need for communicating or interacting with press, television and other media. It may be for the purpose of advertisement or announcement or clarification or image building.
For larger organizations, press relations and media contact is an essential function that needs careful attention. There is considerable literature on ‘Business Communication’ and ‘Business Management’ discussing this important area.
10. Consumer Fora:
Another section which businesses will have to deal with relates to varied consumer organizations, consumer courts and consumer lobbies. Some businesses like banks will also have to deal with ombudsmen.
While some of the more important or major sections with which a business organization generally interacts are described above, there could be a host of other agencies as well. These would include supervising agencies, employment agencies, courts and judicial organs, international bodies, financial institutions and at times religious and charitable institutions.
Communication thus plays a very vital role in modern day business organizations. In fact, the very effectiveness of a business depends upon its ability to communicate effectively with all the sections with whom it interacts.
Effective communication is a sine qua non, or a must for effective performance. Organizations carry out numerous activities through various departments and individuals, and communication facilitates the integration of all these activities.
Six Major Reasons:
In their book, Management, Koontz and Weihrich list out six major reasons for communication within an enterprise. These are to:
1. Establish and disseminate goals of the enterprise
2. Develop plans for their achievement
3. Organize human and other resources in the most effective and efficient way
4. Select, develop and apprise members of the organization
5. Lead, direct, motivate and create a climate in which people want to contribute
6. Control performance
All these, as we have seen earlier, relate to various internal objectives within an organization such as goal setting, planning and budgeting, human resources management, monitoring and control.
Additionally, communication has also to meet the objective of communicating and interacting with the stakeholders and other external public. Business communication thus encompasses a wide gamut of areas, activities and individuals, both within and without.