Moral Leadership in Business by Sebastian Văduva Victor T. Alistar Andrew R. Thomas Călin D. Lupiţu & Daniel S. Neagoie

Author:Sebastian Văduva, Victor T. Alistar, Andrew R. Thomas, Călin D. Lupiţu & Daniel S. Neagoie
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

4.1 Who Are, in Fact, the Stakeholders?

The one who will use his or her abilities and constructive imagination in order to see how much he can give in exchange for a dollar, instead of thinking how little he can give in exchange for a dollar, will certainly succeed.—Henry Ford, Founder, Ford Motor Company

From shareholders, employees and suppliers, clients, activists, communities, NGOs, and, not in the least, the government, all these entities can be at the same time a company’s stakeholders. But since the interests of these categories do not always coincide (they are sometimes even contrary) and the resources an enterprise can allocate for satisfying their wishes are limited, there must be a stakeholder hierarchy, varying according to their importance.

Therefore, a first classification will split them between primary stakeholders, or those involved directly in the company’s activity (shareholders, employees, suppliers, clients), and secondary stakeholders, who, even though they influence the activity, are also influenced by it, and their involvement is not a direct one (media, NGOs, etc.). In addition to these, there are public stakeholders, represented by the state’s institutions that organize and administrate the legislative framework within which the company operates. Another classification refers to how important the stakeholders are for the company’s existence. Therefore, core stakeholders are those without whom the company cannot survive (usually the primary ones). Strategic stakeholders have a different importance for the company in a certain moment, depending on the existing opportunities and threats. Not lastly, environmental stakeholders are those that exist in the environment where the company operates, without them being among the core or strategic stakeholders.

Stakeholders’ prioritization is done firstly on a set of attributes that targets the degree to which these have the right of formulating expectations regarding the company’s activity, the pressure they can put on having those expectations fulfilled, and the speed with which the company must answer their requests. These three attributes are legitimacy, power, and imperativeness. A stakeholder can possess all these attributes at the same time, a combination of two of them or only one of them, but when the stakeholder has none, he/she becomes irrelevant for the company. Stakeholders’ relevance will correlate positively with their cumulative number of attributes—power, legitimacy, and imperativeness—perceived by managers. 1

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