Influence of Stakeholders in Contemporary Organisations

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Table of Contents

Introduction
The Power and Influence of Stakeholders in a Modern Organisation
Conclusion
References

Introduction

Public relation involves the management of information between an individual or an organisation and the larger public. The process of handling this information may affect the target audience depending on how it is carried out. The parties involved in the undertaking can be referred to as stakeholders.

They include the communicator, the channel of communication, and the audience or recipient of the information. The word ‘stakeholder’ in an organisation refers to a person or party who is interested in something pertaining to the firm.

The individuals play a crucial role in the well-being of an organisation. Employees, clients, and suppliers are examples of stakeholders.

According to Fill (2002, p. 235), it is important for an organisation to identify and understand its stakeholders. The move helps to determine where power lies in the matrix of the firm. In turn, this impacts on strategies at various levels of the focus organisation (Fill 2002, p. 235).

A critical look at this statement reveals that Fill’s claim is factual. It is true that stakeholders play a crucial role in the operations of a contemporary organisation. In this paper, the author will critically evaluate this statement from the perspective of motivation, communication, classical organisation, and human relations theories.

The Power and Influence of Stakeholders in a Modern Organisation

Identifying Stakeholders

In many organisations, most decisions are made by the management team. At times, the administrators fail to take into consideration the impacts of their decisions on various stakeholders. Implementation of these decisions and policies affects stakeholders, customers, suppliers, and other parties in various ways.

A negative reaction on the part of these stakeholders may disrupt the activities of the organisation (Fill 2002, p. 236). According to Fill, it is important to understand these parties and their needs. They are the ones who determine the location and distribution of power in the organisation.

They inform who holds power and influence and how they use it. It is also important to note that understanding these individuals affects the formulation and implementation of strategies at different levels of the organisation. In addition, it impacts on the impacts of these decisions on the firm (Fill 2002, p. 233).

Organisations are formed to achieve varying objectives for the owners. They have a set goal that they have to fulfil within a specified period of time. To achieve these objectives, the firm can adopt different strategies.

As stated by Fill (2002, p. 235), understanding stakeholders is a strength that helps the entity to come up with the strategies needed to oversee its operations. The focus of an organisation, as stated by Fill (2002, p. 235), refers to the objectivity of the firm.

A focus organisation works towards the achievement of the set goal. Such an entity has various traits. They include unity, transparency, and respect. According to Fill (2002, p. 236), the success of the operations of such a firm depends on the nature of these characteristics. The management is held responsible for most of the decisions that are made within the entity.

The policies implemented can either be strong or poor. Their strengths and weaknesses depend on, among others, the management’s level of training. They are also determined by the strategies applied by the firm in resolving conflicts (Fill 2002, p. 237).

The level of training, on its part, depends on the operations of the organisation. Training the management team is important to the firm. According to Fill (2002, p. 235), the move helps the owners of the firm to understand the stakeholders of the organisation.

It is also noted that the norms of the entity and the environment within which it is operating can affect the stakeholders either negatively or positively.

The administration team is charged with the responsibility of cultivating an enabling environment for all stakeholders. Consequently, exposing the managers to different environments equips them with the skills needed to handle their customers and other stakeholders.

The environment within which the organisation is operating is determined by the relationship between the stakeholders and the management team (Coombs 2007, p. 170). The observation supports Fill’s assertion that identifying the needs of the stakeholders is important with regards to the success of a focus organisation.

Identifying and Understanding Stakeholders from the Perspective of the Motivation Theory

Different theories have been used to identify and explain stakeholders in a contemporary organisation. They include, among others, the motivation theory. According to this model, stakeholders, need to be treated in right way.

They are some of the major determinants of the location and flow of power in an entity (Coombs & Holladay 2002, p. 180). The power associated with encouraging stakeholders in their various capacities can in turn play a role in the development of the organisation.

It influences the formulation and implementation of strategies at a number of levels within the firm (Fill 2002, p. 235). According to Fill (2002, p. 235), stakeholders are an asset to an entity. However, their value to the firm depends on how this asset is utilised to yield the required results.

Stakeholders can bring down or build an organisation. If they are motivated enough, they will support the firm. However, if they lack inspiration, they may work against the success of the organisation.

Motivation theories explain how stakeholders can be influenced to work more. The dedication and morale towards work comes at a price for the management. It all involves understanding what the stakeholders need and require. Building a good working relationship is important (Gagne & Deci 2005, p. 340).

Motivation varies depending on the duties of the stakeholders. The administration team should identify the best ways to inspire the stakeholders. The motivation can be carried out at the individual or the group level. In addition, it can take different forms, including salary increments and introduction of bonuses (Fill 2002, p. 235).

Suppliers also need to be considered in their activities. Stakeholders feel appreciated when their efforts are recognised. They end up working more, which in turn helps the organisation to grow and achieve its goals.

Apart from bonuses, giving the stakeholders time to relax is also important (Locke & Latham 2004, p. 391). It is a way of ensuring that the stakeholders take a break from their routine duties. When they embark on their work after the break, they do so with energy and dedication.

The environmental needs of the stakeholders also need to be taken care of. Establishing a favourable working environment for the stakeholders is one way of motivating them. They are humans and they need to be in safe surroundings free of risks.

Understanding the environmental needs of the stakeholders influences strategy at different levels of the organisation (Fill 2002, p. 235). Again, it is the role of the employer to offer security and enhance safety standards for all its stakeholders.

Poor working conditions demoralises many stakeholders. Many people in an organisation value their safety. It is evident in cases where stakeholders have rioted or disengaged from work due to insecurity issues (Ruigrok & Wagner 2003, p. 77).

The strikes lead to losses and reduced productivity in the organisation. Understanding the needs of the stakeholders helps firms avert these scenarios.

Analysing Stakeholders from the Perspective of the Communication Theory

Communication is important to the operations of a focus organisation. It holds a lot of power that can help in transforming the firm. According to Fill (2002, p. 235), communication among stakeholders determines the relationships existing in an organisation.

In most cases, managers tend to alienate themselves from other stakeholders. It is not a wise thing to do, especially in a business organisation (Gagne & Deci 2005, p. 354). A functional establishment should promote effective communication.

The move allows for the participation of stakeholders in the process of making decisions that are crucial to the organisation (Coombs 2007, p. 169). Involving stakeholders in the decision making process eliminates frosty relationships in the workplace.

It also does away with the barriers that bring wrangles and disputes in an organisation. Socialisation between stakeholders is also an important virtue in a contemporary firm. It makes it possible to carry out different social activities with the stakeholders.

According to the communication theory, the tone used by the communicator may affect the people in the environment. Stakeholders should be treated in a dignified manner as adults. The management needs to identify the right tone to use on them to avoid sounding commanding.

Many people dislike been commanded. Even though it is necessary, some people are resistant to such incidences (Coombs & Holladay 2002, p. 181). Leaders must learn to be polite. Politeness benefits both the management and stakeholders.

In cases of conflicts, it is hard to come to an amicable solution when the management commands the stakeholders. The tone used in communication is an example of a strategy that can work positively for the focus organisation.

Psychological needs like rest, physical comfort, and reasonable work hours are also important considerations in motivation (Jawahar & McLaughlin 2001, p. 400). It is also a way through which a leader can show concern towards the wellbeing of an organisation.

Changes should be communicated in the right way to avoid resistance. Consequently, it is true that understanding stakeholders is power to an organisation. Failure to do this is a threat to the focus organisation.

Understanding the Power of Stakeholders from the Perspective of the Classical Organisation Theory

The classical organisation theory also holds that understanding stakeholders is a move that influences strategies in a focus organisation. The model lays down different organisational principles. They include guidelines set aside by the management to help in the smooth running of an entity.

They are also aimed at solving some of the internal and external problems affecting an entity (Fill 2002, p. 235). A focus organisation needs a set of principles to operate optimally. The principles that are used to guide the operations of the entity are not estimated.

Most of them are things that are discussed upon. After investigations, some of them are put into application. A good example of such a principle is the need for uniforms. Different organisations opt to have uniforms because of various reasons.

However, the purpose of these attires is not to torture the stakeholders. On the contrary, it is a way of marketing an organisation. Some entities also use uniforms to be presentable (Locke & Latham 2004, p. 401).

Consumers in today’s market appreciate organisations that are unique and presentable. Consequently, the use of uniforms endears the firm to the market. According to the classical organisational theory, using uniforms is a strategy that can be used to enhance the image of the firm.

The approach is also effective in public relations. According to Frederick Taylor, scientific management requires the application of various principles. Most of these policies are important in public relations. Relating with the public is not limited to management and stakeholders.

On the contrary, it involves other individuals, including the public itself. The stakeholders involved include the management, customers, employees, suppliers, and the public. The principles are in line with those advocated for by Fill (2002, p. 235).

The first policy involves assigning all responsibilities to the manager rather than to other stakeholders. It is true that a focus organisation has to take into consideration the strategy to use in allocating responsibilities. The concerned parties should identify and analyse the stakeholders before the allocation process (Fill 2002, p. 235).

It is the duty of the administrators to assign duties. Different stakeholders are qualified to perform given tasks. Sorting them out accordingly is what a manager in a focus environment should do (Fill 2002, p. 235). Planning and designing of work should be carried out in accordance with the qualification of the stakeholders.

The strategy helps to deal with low productivity. It also helps to do away with avoidable mistakes in an organisation (Ruigrok & Wagner 2003, p. 78).

The next principle after selecting the best individual to carry out a designated task involves identifying the right way to carry out the job. According to Fill (2002, p. 235), a focused organisation must be responsible for its actions. Guidance with regards to all operations is always recommended.

The whole entity is responsible to the market and the public. Informing stakeholders on the right method to carry out their duties helps in perfecting their roles (Locke & Latham 2004, p. 399). Scientific management also requires proper training of workers and other parties (Fill 2002, p. 235).

A focus organisation has to create the best environment for these stakeholders. To this end, every stakeholder should be comfortable in their position. Each of them should know what to do and how to do it. The relationship between stakeholders and the management is enhanced through training and other interventions.

Leaders need to understand these stakeholders to know what they can handle. Such knowledge informs the flow of power from the management level to the echelons of the stakeholders.

Scientific management of organisations informs the location of power in the entity. The scientific theory stipulates that monitoring performance is one of the strategies that can be used to manage a focus organisation.

Some managers fail to evaluate the progress of their projects (Fill 2002, p. 235). Such ignorance is not recommended as anything may happen in the process. The theory provides for support in the work organisation.

Human Relations and Stakeholders in Contemporary Organisations

The theory explains how the management and the stakeholders should relate to each other. The model brings together the communication and motivation theories. To a large extent, the theory takes communication as a two-way experience.

The two channels include the management stakeholders’ ways of communication. Human relation theory concurs with the statement by Fill (2002, p. 235) about understanding stakeholders. It challenges leaders to relate well with their charges (Cohen-Charash & Spector 2001, p. 300).

The management is required to monitor the progress made by stakeholders in their daily activities. The theory underscores the importance of direct communication with stakeholders. It is why organisations have human resource and marketing managers. The duty of these administrators is to monitor the welfare of stakeholders.

The strategy works in many organisations because it is easy to learn about stakeholders by establishing direct contacts with them. Some firms avoid this direct interaction with their stakeholders. Such entities use memos to communicate changes to suppliers and other stakeholders (Locke & Latham 2004, p. 389). Such an approach makes the stakeholders feel neglected by the management. Leaders in a focus organisation make efforts to meet all members of staff at least once or twice per year (Friedman & Miles 2002, p. 14). It is the reason why annual general meetings are held. A wide range of issues are discussed during these gatherings.

The most important element in human relation is the affairs of the stakeholders(Fill 2002, p. 236). Their grievances have to be taken into consideration by the management. During meetings, leaders are required to discuss the solutions they have to some of the problems presented.

Awards and promotions are also dealt with during such gatherings. Effective human relation establishments enhance the performance of the organisation. Public relation involves skills in human interactions. The whole aspect of human relations is power in itself. It influences strategies within a focus organisation (DeShon & Gillespie 2005, p. 1096).

Team building is a strategy used in a focus organisation to promote its operations. It involves bringing stakeholders together to work towards a common goal for the firm. In the process, a team spirit is cultivated. Performance under such circumstances is improved when stakeholderse relate well with each other.

The management team has a role to play in this regard. For example, the team is expected to provide stakeholders with conditions that are conducive for teamwork.

According to Fill (2002, p. 235), creating a team spirit is a strategy that a focus organisation can apply to achieve its objectives both in the long term and in the short term.

Team building in itself also invokes motivation (Jawahar & McLaughlin 2001, p. 400). When people work together, they motivate each other. They are able to overcome different challenges that crop up at the workplace.

Conclusion

It is true that understanding who stakeholders are helps to determine where power lies in an organisation. In turn, this influences strategies at different levels within a focus organisation. A focus organisation is fully dedicated in achieving all its short and long term objectives.

A number of models, such as motivation, communication, classical organisation, and human resource theories, support this assertion. The relationship created at the workplace depends on the efforts applied by both the management team and the stakeholders.

Leaders in a focus entity must guide their stakeholders to help them adopt the right strategies required to meet the objectives of the firm. Motivation of these stakeholders is also important. The outcome of the whole process is power that moves an organisation towards its goals.

However, for this to occur, managerial effectiveness is required. It is possible that change may be resisted in many firms. However, stakeholders should realise that transformations are necessary. The management team should come up with strategies to counter this resistance among stakeholders.

References

Cohen-Charash, Y. & Spector, P. 2001, ‘The role of justice in organisations: a meta-analysis’. Web.

Coombs, T. 2007, ‘Protecting organisation reputations during a crisis: the development and application of situational crisis communication theory’, Corporate Reputation Review, vol. 10 no. 3, pp. 163-176. Web.

Coombs, W. & Holladay, S. 2002, ‘Helping crisis managers protect reputational assets: initial tests of the situational crisis communication theory’, Management Communication Quarterly, vol. 16 no. 2, pp. 165-186. Web.

DeShon, R. & Gillespie, J. 2005, ‘A motivated action theory account of goal orientation’, Journal of Applied Psychology, vol. 90 no. 6, pp. 1096-1127. Web.

Fill, C. 2002, Marketing communications: context, strategies, and applications, 3rd edn, Financial Time Prentice Hall, Harlow.

Friedman, A. & Miles, S. 2002, ‘Developing stakeholder theory’, Journal of Management Studies, vol. 39 no. 1, pp. 1-21. Web.

Gagne, M. & Deci, E. 2005, ‘Self‐determination theory and work motivation’, Journal of Organisational Behaviour, vol. 26 no. 4, pp. 331-362. Web.

Jawahar, I. & McLaughlin, G. 2001, ‘Toward a descriptive stakeholder theory: an organisational life cycle approach’, The Academy of Management Review, vol. 26 no. 3, pp. 397-414. Web.

Locke, E. & Latham, G. 2004, ‘What should we do about motivation theory?: six recommendations for the twenty-first century’, Academy of Management Review, vol. 29 no. 3, pp. 388-403. Web.

Ruigrok, W. & Wagner, H. 2003, ‘Internationalisation and performance: an organisational learning perspective’, Management International Review, vol. 43 no. 1, pp. 63-83. Web.

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