Advantages of stakeholders
Stakeholders are individuals or groups of people who are part of a company. It could be directly or indirectly, but they do have a stake in the company or organization. The most fundamental stakeholders are investors, clients, shareholders, the government, directors, employees, suppliers, creditors, unions and the community. All of these people are extremely important in running the organization. They determine the failure or success of a company. Investors commit some of their capital to the company, expecting to reap some profits. This is one way of raising capital for running the company. The role of the investors ensures that the company will never be paralyzed in its operations (Freeman et al, 20).
Companies wholly rely on their customers for their existence. If products from a company are not being bought, then it is likely to be incapacitated. Therefore, the customers are the most fundamental stakeholders of a company. Sache et al (32) adds that their opinions and comments are highly considered as well as needs. Through their contribution about the products, they assist the company to maintain a high quality of the products.
Shareholders are also called owners of the company. By buying various shares in the company, it makes them owners. They are part of all the decisions made in the company. Shareholders are vital because when they buy shares they also add to the capital. They also assist in solving problems and making crucial decisions in the company. They benefit by enjoying the dividends from the shares (Sache et al, 46).
In parastatals and public corporation, the government is a major stakeholder. The government cushions such companies from any exploitation. It acts as a good advisor on legal matters. In public companies, the government owns more than half of the shares. This shows that it is a major contributor to the capital of that company. The government may also help in tackling difficult matters met by the company (Freeman et al, 31).
Directors are professionals in management hence experienced. They are involved in everyday management of the company. They ensure that there is smooth running of all the activities done daily. They also solve petty issues that do not need attention from the rest of the stakeholders. In general meetings with the rest of the stakeholders, they assist to account for the activities or anything else under their watch.