As social beings we cannot exist in isolation, we live in various communities with different types of people, some we are well acquainted with, others, not so much. Let me use an organization as a sample of a human community.
An organization is an organized group of people who come together to achieve a common objective. Some are profitable organizations, while others are out solely for the service of humanity. The purpose of different organizations might differ, but most of them have stakeholders.
Who are the stakeholders? A stakeholder is any individual or group interested in an organization and the outcomes of its actions. Find below some examples and their interests:
Shareholders: These are the financiers of the business, provide startup capital or additional capital, and in return receive a dividend.
Customers: These are people who buy the products or services rendered by a business or organization.
Supplier: provides goods or products and services needed by an organization.
Employees: Workers in an organization in return for salaries and wages.
Community: These are the people who live around the organization who are directly or indirectly affected by business operations.
As managers or business owners, we owe responsibilities to these stakeholders, if left uncatered, could affect the smooth running of the business. So let me talk a little about responsibilities we owe to some stakeholders as managers.
Responsibility to Shareholders:
Shareholders typically own the business, they have the right of ultimate control essentially because they have put in their funds in a venture for which they do not know the outcome in advance, hence a risky decision. Also, as managers, we must ensure we pay shareholders their due obligations timely – dividend. The risk appetite of various shareholders differ, therefore they have the right to information about any significant decision that could pose a significant threat to the going concern of the business.
Responsibility to Customers:
Customers are crucial to the success of a business. Two paradigms guide our relationship with customers – the service paradigm and the warfare paradigm.
Warfare paradigm: This is when we impose our interest on the customer even if it is against their interest. The skill used in this paradigm is manipulation. They manipulate their customers to believe their antics.
Service paradigm: this on the other hand is out to protect the customers’ interest, by ensuring they achieve optimum satisfaction from whatever they buy from us. Naturally, the customer retention rate under this paradigm would be higher.
As business owners, we must ensure integrity in our dealings with customers hence the service paradigm is more appropriate.
Responsibilities towards Employees:
Employees are not limited to those in organizations alone, workers in our various homes are our employees as well, they deserve to be treated with the respect and dignity they deserve. They are human and members of the community. They should not be made to feel less of a human. Also, we must discharge in good faith our responsibility under the employment contract. Payment must be commensurate with the level of service rendered and should be on time. Loyalty often grows when employees enjoy their job, although this should not be the primary reason we treat them right.