Ignore stakeholders  in strategic planning  at your own peril

Ignore stakeholders in strategic planning at your own peril

A “stakeholder” is anyone who has an interest in the value that the organisation creates. In a commercial organisation, its stakeholders would be shareholders, customers, suppliers, employees, government and its agencies and the community or society.

When developing strategic plans, right from the mission statement, which would capture the purpose why the organisation is in existence, the vision and  the values that the organisation espouse, it’s very important for the organisation to consult its various stakeholders.

Stakeholders can affect positively or negatively the ability of an organisation in attaining its goals and objectives. They can affect the implementation of the organisation’s strategies.
As a business owner or manager you must be aware of the various groups of stakeholders that you interact with if you have to succeed in running the business. Some of the stakeholders and their needs are discussed below.

The first group of stakeholders is owners. A business may be owned by an individual, partners or by a number of shareholders forming a company.
The owners are there to provide the resources that are required for the business to operate efficiently. They provide cash to fund the business, it employs workers to run the operations and motivate these so that they perform well, it finds suitable premises to operate from and procure machinery, equipment and raw materials to produce the products or provide the service.
Owners have to make strategic decisions to ensure the business achieves its mission. In return they expect a reasonable return on capital invested. Failure to receive the profit will result in the closure of the business.

Employees is another group which is engaged to carry out assigned tasks to achieve the company’s objectives.
Employees are supposed to work hard to expedite the assigned tasks.  For the employees to achieve the company’s objectives they should be motivated and work as a team and should have certain skills.

Employees have to adhere to certain guidelines as outlined in the policies. Employees will have to be rewarded for the effort they put in ensuring the company achieves its goals. A failure to do so can result in them stopping providing their services.

Employees can make or break the implementation of a strategy since it’s through human resources that strategies are implemented. Customers are other key stakeholders. They purchase goods and services provided by the company in order to satisfy their needs.

Customers also help the business to identify changing trends in the market and so prepare business operators for future demands. Customers expect quality products and services at an affordable price.

If a company can’t supply the right product or service at the right price with the right quality they will move their business to a competitor who is able to provide what they need.
A customer can also prevent a company from adopting strategies that affect them adversely. So it’s very important for a company to ensure that it adopts strategies that meet the needs of its customers.

Roy H Williams said, “The first step in exceeding your customers’ expectations is to know those expectations.” The government is another key stakeholder. The government manages the economy within which businesses operate. The government creates a conducive environment to operate and put in place regulations to protect employees, customers, the community and also ensure there is fair competition.

Some government agencies ensure that product standards as well various legislations are adhered to ensure the protection of consumers’ rights and the community.
Any strategies or policies that will work against the government’s policies will attract the wrath of the government.

A company can be closed if it fails to pay taxes or does not adhere to certain environmental policies with regard to pollution or discharge of hazardous substances.
Lastly but not least, the company must be aware of the society as a whole, and its needs and how its activities affect it.

A company engages in certain activities that might impinge on the society negatively like causing air pollution if it’s a cement factory or discharging harmful waste into rivers and seas if it’s a chemical company.

Society will raise its concern if anything dangerous is being done by a company. Society keeps businesses in check by making them aware of their impact on society through various media. There could also be pressure groups that will complain to the government. A company should therefore be alert to the needs of society so that its performance is not affected adversely.
To show its concern for its stakeholders ArcelorMittal identified six most material aspects of corporate responsibility in 2013 as: occupational safety, green house emissions, air and water emissions, accountability and transparency, occupational health and employee engagement. Ignoring these factors will affect its operations.

Stewart Jakarasi is a business & financial strategist and a lecturer in business strategy and performance management. l For assistance in implementing some of the concepts please contact him on the following contacts: sjakarasi@gmail.com or +266 58881062 or on WhatsApp +266 62110062

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