Stakeholder Relationship Of Stakeholders

STAKEHOLDER THEOTY:

A) TAXONOMY OF STAKEHOLDERS

A corporate stakeholder can affect or be affected by the actions of a business as a whole. In simple terms, stakeholders can be defined as individuals or groups who either get advantage or are disadvantage by corporate decision or action. Very often, the term society and community are used interchangeably. This raises certain discrepancies, which can be settled if the stakeholder approach is accepted. The social responsibility of organizations does not lie outside the organization. It is a part of the entire process, from planning to production and marketing.

The concept of stakeholder was first used in 1963 internal memorandum at the Stanford research institute. It defined stakeholders as “those

Secondary stakeholders are local, state, and federal governments, regulatory bodies, civic institutions and groups, special interest groups, trade and industry groups, media, competitors.

B) STAKEHOLDER RELATIONSHIP

To understand the relationship of the above- mentioned stakeholders, let us take a closer look at their actual functioning, as shown in Fig. 2.3

Figure 2.1.4 Stakeholder relationship

Stockholders:

Shareholders and investors have a financial stake in the organization, in the form of investment in stocks, bonds, etc. Having invested directly or indirectly through certain exchanges, these investors would certainly demand returns and the corporation would have to honour this demand to ensure future investments for carrying on business. Of course, the stakes of the stockholder will differ, based on the type of owner and their preferences, as well as on the type of company or firm, i.e., whether the stocks are widely distributed or held closely by a small group (e.g., a