STRATEGIES TO INCREASE STAKEHOLDER ENGAGEMENT
Published Nov. 8, 2020, 11:27 a.m. by Moderator
Stakeholder engagement is the core of any successful company’s Corporate Social Responsibility plan. Social media has given the power to stakeholders and negative backlash from any of the stakeholders spells doom for a company’s profits and share price. Companies have to understand that influencers, public officials, shareholders, civil society, and the private sector play a crucial role in determining brand value. To create value, companies have to construct meaningful and long-term relationships with stakeholders. The best way to increase engagement is by consistent, continuous, and open engagement. In a typical company setting, stakeholders include customers, employees, investors, suppliers, and distributors. These different groups have varying concerns and interests and sometimes this leads to clashes. Investors want more profit, consumers want cheaper products. Companies have to find a way of satisfying both sides as they are crucial to the success of the company.
Apple stakeholders include customers, employees, shareholders, suppliers, and distributors. To satisfy all the differing concerns of stakeholders, the company has found a perfect balancing act. Consumers of the products are the most important stakeholder group. Apple products are more expensive than the products of our competitors, to justify the high price, Apple products have to be of the highest quality with sleek controls and beautiful aesthetics.
Customers will have the option of pre-ordering 3 days before the delivery date. This is to customize the product with the customer’s preferred designs. Delivery will take between a day for short distances and two days for longer distances. This strategy also addresses the environmental considerations of customers. A robust recycling mechanism should be implemented and the products should be created with the least damage to the environment. Corporate Social Responsibility (CSR) endeavors to alleviate customers' concerns about higher prices (Perez, 2015). Companies should identify social causes that are dear to their customers.
Employees are the second most important stakeholder group. The concerns of employees are largely about compensation and career growth (Winkler et al, 2018). To be a technology leader a company has to constantly innovate, and this requires a talented, highly motivated, and dedicated workforce. Companies should reward employees with competitive compensation packages that include health benefits, paid maternity, and time off work. Compensation is the main reason why employees quit their jobs. Hiring and training new employees are expensive while adequate compensation prevents employees from leaving.
Training and development opportunities should be provided to all employees. On-job training should be conducted regularly and employees should be encouraged to take part. Acquiring new skills enables employees to move to newer or more challenging roles. Promotions should be based on merit and training programs should be the standard for job promotions (Winkler et al, 2018). Career progression is one way to ensure a company retains its best talent. Companies should implement diversity management programs to increase the hiring of a diverse workforce to better understand customers and to widen the market.
The third stakeholder groups are the investors (the shareholders). This is the group that determines the policies and procedures of the company. The overarching interest of shareholders is to maximize return on their investment. To satisfy shareholders the company has to make a profit and have little to no debt (Herremans et al, 2016). A simple agreement with investors could entitle them to 5 percent of the profit for every batch sold. This is shared equally between shareholders and it runs for two years. At the end of the two years, there will be a review of the agreement.
The fourth stakeholder groups are the suppliers and distributors. Without them, the products would not be able to reach consumers. The supply chain has to be fast and efficient. Delivery times have to be met and the products have to be in pristine condition. The interests of these groups are mainly proper compensation and job security. To safeguard the interests of employees and consumers, suppliers and distributors have to sign a Supplier Code of Conduct which governs their treatment of both. Suppliers and distributors should be paid their dues on time to ensure that the supply chain is always open.
Successful companies have to take a lead in stakeholder engagement. Companies have to be very responsive to the concerns of its stakeholders. It takes an innovative and consultative approach to address all the issues raised by stakeholders. No single policy can address all concerns of stakeholders. Stakeholder engagement determines the brand value of the firm.
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Manetti, G., & Bellucci, M. (2016). The use of social media for engaging stakeholders in sustainability reporting. Accounting, Auditing & Accountability Journal, 29(6), 985-1011. doi:http://dx.doi.org/10.1108/AAAJ-08-2014-1797
O'riordan, L., & Fairbrass, J. (2014). Managing CSR stakeholder engagement: A new conceptual framework. Journal of Business Ethics, 125(1), 121-145. doi:http://dx.doi.org/10.1007/s10551-013-1913-x
Perez, A. (2015). Corporate reputation and CSR reporting to stakeholders: Gaps in the literature and future lines of research. Corporate Communications: An International Journal, 20(1), 11-29.
Winkler, A. P., Brown, J. A., & Finegold, D. L. (2018). Employees as conduits for effective stakeholder engagement: An example from B corporations. Journal of Business Ethics, 1-24. doi:http://dx.doi.org/10.1007/s10551-018-3924-0