The Importance Of Stakeholder Groups In Society

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According to Porter, corporations and societies depend on each other to thrive successfully. Successful corporations need a healthy society, while a healthy society needs successful companies. In order to achieve progress, it is absolutely vital for society to coordinate with the corporations that operate in its community as they are far better at providing opportunities for job and wealth creation, and improving conditions than programs run by the government. However, in order to successfully achieve high levels of growth, it is important for corporations to identify and satisfy all stakeholders associated with their business activities, and engage in CSR activities that are better aligned with their overall strategy. A stakeholder can be an individual or a group who has a direct or indirect interest in the business and ‘can affect or be affected by the actions decisions, policies, practices or goals of the organization.’ Stakeholder groups of businesses in a society can be broadly categorized as…show more content…
In a much broader sense, the owners of a corporation can be further divided into shareholders and board members. A shareholder is defined as an individual, company or institution that holds a share in the company. Shareholders can, hence, be regarded as the owners of the company and, therefore, have several legal rights. Shareholders are important providers of the company’s capital and, therefore, have a significant amount of influence in the management of the company. According to Friedman, a corporate executive 's responsibility to his owners includes carrying out business operations that fulfil the owners ' or shareholders ' desires of maximizing profits in accordance with the legal and ethical rules followed by society. Apart from maximizing shareholder value, a corporation must provide shareholders the right to vote in the organization and the liberty to buy and sell shares as they
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