CHALLENGES OF KEY STAKEHOLDERS IN BUSINESS ORGANIZATION

CHALLENGES OF KEY STAKEHOLDERS IN BUSINESS ORGANIZATION

Izzati Binti Mohd Ideris

Masitah Binti Md Ali

Nur Azni Binti Laini

Siti Nor Jannah Binti Abu Hassan

Faculty of Information Management

Universiti Teknologi MARA, Puncak Perdana Campus

Abstract  

The purpose of this article is to identify the challenges that faced by the stakeholders in business. Stakeholders in the business organization are the important person and someone who has invested money into something or who has important connection with it, and therefore is affected by its success or failure. There have a challenges that stakeholder need to face in business organization. The research methodologies that have use in this article are conceptual paper and literature review. To have a good stakeholder in business organization is need come together to build a good relationship to gain insight into the market and societal environment. This is because many organizations faced with significant challenge in the area of stakeholder. It is hope, this article could give some contribution to organization to enhance the relationship with stakeholder and solution to face the challenge among stakeholders.

 Keywords- Corporate social responsibility, Stakeholders, Business performance.

Introduction

‘‘A stakeholder in an organization is any group or individual who can affect or is affected by the achievement of the organization’s objectives’’ (Freeman, 1984, p. 46). From the corporate perspective some stakeholders such as employees and customers are critical for corporate survival (Lozano, 2005) as they provide the organization with essential resources (Pfeffer and Salancik, 1978). This line of reasoning is usually referred to as instrumental stakeholder theory and provides a basic rationale for the question of why stakeholder concerns should be considered in the way in which an organization is directed an controlled. Instrumental stakeholder theory holds that the corporation needs to pay attention to only those stakeholders who can affect the value of the firm (Donaldson and Preston, 1995; Mitchell et al., 1997; Jensen, 2001). From an instrumental perspective, stakeholder governance needs to give a voice to powerful stakeholders in order to secure their contribution to the success of the firm. This line of thought usually conceptualizes stakeholder dialogue strategically and is oriented around the needs of the organization such as risk management or the realization of opportunities (Ulrich, 2008)

CHALLENGES OF STAKEHOLDERS

The board has to ensure that management is looking for new opportunities, has identified the stakeholders who are critical for the success of major initiatives and that there is a coalition of support among them (James, S.2016). An overview is needed of potential claims from stakeholders, like customer and societal networks, who believe they have a case against management, or the company. From this case, there a some challenge that has been face by the stakeholders in business. The biggest challenges face by stakeholders is there have a lack of meaningful integration of the stakeholders. This because organization need to ensure from the onset that managing expectation and agreeing a set time scale that all involved can adhere that the project has been agree upfront how to handle the issue (James S. 2016). Challenges that involved stakeholders are listed below.

a)      Time

All the stakeholders face the same challenges in organization which is with the time. From all the perspective agree that engaging stakeholders requires a significant investment of time, especially if it is to be done well (Kruger, T. 2016). From the reviewer, stakeholders are engaged at more than one time point. This also involved the disagreement as to whether the extra time involve resulted in an improved product. This situation has other arguing that getting the results out to the stakeholder earlier is more important than engaging them in the systematic review process.

b)      Training and resources

The biggest challenge for stakeholders is about training and resources. This is because beside need to have an extra time to involve, lack of training and resources also can be the challenges for stakeholders.  This can cause the limit of benefits for stakeholders’ engagement. This can refer to the experience of the stakeholder, where stakeholders who do not have a background or experience may require additional training and ongoing support in order to have a meaningful contribution to the process (Iyer, S. 2016). So, the solution for this challenge is, organization must ensure that the chosen stakeholders must have the necessary background and training and also the sufficient resources to support their role.

c)      Balancing multiple inputs.

Balancing multiple inputs is defining to the relative value of different stakeholder inputs. These can see that only a limited number of stakeholders are engaged and can be a challenge to determine whether a particular stakeholder is an outlier or has another agenda. This process is determined because not all inputs are equal and it also difficult to access (Motuapuaka, M, 2015).

d)     Stakeholders reflection

The key to dealing with the stakeholders group is a balance approach. This is because it rarely serves a leader well to focus on one group to the exclusion of other. All the stakeholders that have been choose to have legitimate needs that must be meet by the company to the best of its ability. This has been done to make sure the organization can achieve exceptional results over the long term with stakeholders (George, B. 2003).

Figure 1:  Stakeholder reflection

5.0 CONCLUSION

            To conclude, stakeholder theory in the context of the organization can include the objective of a business is to make profits for stakeholders or the companies are networks of parties working towards a shared goal. Employees, supplies, stakeholder, external interest groups and customers co-operate to create mutually beneficial results. (The stakeholder value perspective). According to Turner, J, R., V. Kristoffer, Experienced Project Manager, “Stakeholder management is critical to the success of every project in every organization. I have ever worked with. By engaging the right people in the way in your project, you can make a big difference to its success… and to your career.” As the work, you di and the business run become more important, it will affect more and more people. Some of these people have the power to undermine the business and the positions. Stakeholder Management Business is the process by which you identify your key stakeholders and win their support. Stakeholders in business need to identify as a first stage and start understanding the most importance stakeholder that are needed to deal with.

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