In Nigeria businesses have been classified under several heads. These classes are
i. Business name.
ii. Private Company Limited by Shares/Guarantee/Unlimited.
iii. Public Company Limited by Shares/Guarantee/Unlimited.
iv. Incorporated Trustees.
Depending on the type of business entity you decide to fit your enterprise in, it is important to know that Stakeholders are very vital to the success of a company.
A public company limited by shares for instance is run by majority shareholders of the company. They decide who manages the company and how management is to be carried out. They are actively involved in this because this assist them put in place quality management staff who will grow the organisation and thereby actualize more dividends for them. More dividends mean more shareholders and more shareholders mean more capital for expansion or growth of a business entity. It is then important to identify stakeholders as this cannot be overemphasized. They help improve and grow one’s business as against running it all by yourself under a business name. it is best to identify your stakeholders, engage them and make them your ally. You are better off this way and you can achieve a lot doing this. For the benefit of anyone reading this article, it is expedient for us to consider a hypothetical business entity and truly see the importance of stakeholders. Take for instance. Mr A gets an idea to set up and manage an engine oil manufacturing company. He registers the company as a public company limited with shares with the name Indigo Energy Limited.
The business intends to carry on importing or buying in a wholesale capacity, base oil which is the major raw material required for manufacturing engine oil. The company is open to selling in smaller quantities to retailers who want to buy base oil and manufacture engine oil for nationwide distribution. Mr. A got Mr. Mukhtar an Indian, and Mrs. M. and Mr. F. to subscribe as shareholders during at the incorporation of the company. The company has been running smoothly but there has been no nationwide distribution of the company’s product or recognition of the company, and this has made profit a little below average. What benefits will stakeholders do to improve the situation at hand? Who are stakeholders? A stakeholder in a company is someone who has an interest or stake in that company and is affected by what the company does. A stakeholder has an influence on what a company does Stakeholders give your business practical and financial support.
Stakeholders are interested in your company and business ranging from employees to loyal customers and investors. From the definition above, we can categorically tell who the stakeholders are in an organisation. Stakeholders can include customers, employees, community members, politicians, media, shareholders, suppliers, investors, government departments, regulators, neighbouring businesses, and nearby residents. Plus, all their extended networks of families, friends, and colleagues We have direct and indirect stakeholders. Direct stakeholders are Shareholders, Directors, Employees, Creditors etc. Indirect Stakeholders include the public whose public opinion directly affect the company.
This means if the company’s activities affect the public negatively for instance, environmental hazards to people in a community, their protest could result to governmental sanctions for the company or more expenses to remove the company’s name from the mud. To give answers to the questions in the scenario above, we can say that stakeholders will facilitate the growth level and nationwide recognition for Mr. A’s company. Calling for more subscribers to subscribe to the company’s shares and employing experts and quality personalities to manage the company as directors and employees who can give deep insights and expertise on how to grow the company financially and to ensure nationwide distribution. Creditors are also very important to the growth of the company. When there is proper corporate governance for a company and transparency by the account books and activities carried on in an organisation, you can be sure that creditors will be willing to provide capital or raw materials because they know they will get it back with interest. A successful relationship between a business and its stakeholders is built on working together. If your business provides a product or service that genuinely improves the quality of your customers who are the consumers' lives, they're likely to go, spreading the word about your offerings because they genuinely want your business to do well.
Investors have a financial place or share in your company, and they certainly want a financial return, but if your interests are aligned and they truly care about the company. So, why are stakeholders very important? And why would you want to engage them? To empower people – Get stakeholders involved in the decision-making process. To create sustainable change – Engaged stakeholders help inform decisions and provide the support you need for long-term sustainability. To build relationships – Create mutually beneficial relationships, build on existing relationships, or foster new ones. To build a better organization – Engaging with stakeholders can bring important issues to light and encourage your organization to develop corporate social responsibility To increase success – Engaging influential groups (who might otherwise hold you back) and turning them into supporters and advocates can boost your chances of success To educate – Stakeholders can be a valuable source of information for your organization, and they may learn something from you, as well Stakeholders are of utmost importance.
With stakeholders you can achieve better outcomes. Stakeholders pave the way for making more profits, maximizing resources and potentials. You can achieve positive results with stakeholders within a short time as against doing it yourself. Identify and engage your stakeholders!
