Developing Stakeholder Relationships

How Do You Create and Develop Relationships With Your Stakeholders?

Understanding Stakeholder Engagement Approaches

Firstly, business managers can create better stakeholder relationships by improving their understanding of stakeholder engagement approaches. Firms can improve stakeholder engagement by showing them increased commitment (Civera & Freeman, 2019). This, in turn, will help to create value processes based on unity of collaboration and interest among all stakeholders.

Creating a Positive Environment for Stakeholder Communication

Another fitting approach that firms can use to create better stakeholder relations is creating a positive environment for their stakeholders to express their opinions and needs (Civera & Freeman, 2019). Doing so helps to create an enabling and collaborative environment for stakeholders to interact with managers about several key business issues. For example, technologies like blockchain are improving transparency and trust in supply chains – learn more about this in our article on Blockchain in Supply Chain Management.

Emphasizing Transparency, Fairness, and Accountability

Creating fairer, accountable, and honest interactions with stakeholders is also crucial to fostering better and fluid relationships between companies and their stakeholders. Indeed, transparency can aid in rebuilding or creating trust in stakeholder-business relationships. As such, businesses should always share both unfavorable and favorable information with their stakeholders (Civera & Freeman, 2019). Additionally, showing initiative and accountability can also aid in improving interactions between stakeholders and businesses. Accountability encourages shareholders to invest more in the business and employees to perform better at accomplishing the firm’s objectives.

Are Some Stakeholders More Important Than Others?

Differentiating Between Primary and Secondary Stakeholders

Yes. Some stakeholders are more important than others. Firms have two types of stakeholders, namely primary and secondary. Primary stakeholders comprise business investors, suppliers, employees, suppliers, board of directors, customers, and managers. Contrastingly, secondary stakeholders comprise communities and government agencies (Musa & Lysenko, 2022).

Prioritizing Stakeholders Based on Business Context

However, businesses may prioritize their relationships with key stakeholders depending on factors such as size and capital. For instance, a small or medium enterprise may be more concerned with creating a loyal workforce and fluid relations with its suppliers rather than attracting large-scale investors. Contrastingly, a bigger corporation may be concerned with attracting bigger investments.

Valuing All Stakeholders for Long-Term Success

In hindsight, valuing a few stakeholders as more significant than others can make it challenging to accomplish long-term business objectives. This is because all stakeholders contribute positively toward the growth of varied firms. As such, the success of businesses depends equally on their effective collaboration with investors, customers, and employees. However, effective growth of businesses similarly relies on the regulations imposed by government agencies.