Stakeholders hold a particular type of stake in a business or corporation and are bound to a company or business enterprise in which they vested different types of interests. A shareholder owns stock or shares in a particular business organization through a financial interest. Shareholders have an equity interest in the company whose shares they own, which they buy financially. Still, on the other hand, stakeholders are bound to a company for a long period by vesting interest for different reasons according to their needs. Shareholders can sell or buy different stocks or shares of the company and keep these shares to process them in cash, but they do not need to have long-term bounding with the company and easily leave or get out of the company at any time. However, employees can lose their jobs, but shareholders can limit their losses by selling their stock and shares.
Problems with Stakeholders
The major challenge in front of stakeholders is their interests may not align when the number of stakeholders arises for a particular company in which they have a stake. It is also responsible for the direct conflict in the company. The major goal of the company is to maximize the profit and enhance the value of stakeholders. Still, stakeholders can face difficulties when the performance of the company decline, which also reduces their profits. Suppose companies do not successfully manage the interests and expectations of all the stakeholders. In that case, it also creates problems for its employees and investors that can upset any other group of stakeholders.
Stakeholders can be internal or external for the organization that does not perform direct activities in the company, but their interests affect the actions and outcomes of the business. Employees and shareholders are the internal stakeholders and suppliers, creditors, public groups, and customers are the companyâ€™s external stakeholders. Internal stakeholders can have direct and external stakeholders have an indirect relationship with the corporation. Every type of stakeholder is important for the organization. Internal stakeholders can provide benefits to the organization that are essential to achieving all the business goals through different operations and activities. Some external stakeholders attach through the indirect activities only. All companies need to successfully manage the interest of stakeholders to achieve their targets in the market.
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