Critically Discuss the View that Stakeholder Management is the Crucial Factor in Managing an International Business

This essay discusses the importance of stakeholder management in international business. It covers the role of stakeholders, stakeholder management theories, and factors affecting stakeholder expectations. The essay also provides examples of how companies engage with stakeholders to manage their expectations.

Running Head: Strategic Business Analysis
Strategic Business Analysis

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Table of Contents
Critically discuss the view that stakeholder management is the crucial factor in managing an
international business.......................................................................................................................2
References........................................................................................................................................5

Strategic Business Analysis 2
Critically discuss the view that stakeholder management is the crucial factor in managing an
international business.
Stakeholders can be defined as an internal and external party to the organization which is having
interest in the operations of the organization. Stakeholders can create an impact on the actions,
objectives, and policies of the organization. Stakeholders may get affected by the objectives,
policies, and actions of the business. Stakeholders may have a direct or indirect interest in the
operations of the organization. Stakeholders of an organization can be of different types. These
different types of stakeholders include management and employees, customers, investors and
suppliers, banks and other financial organizations, government, trade unions and pressure groups
(Ackermann & Eden, 2011). This essay will focus on developing knowledge of the role or
importance of stakeholder management. It will also focus on the stakeholder management as a
crucial factor for the management of the business operating at international level.
The term stakeholder management can be defined as the process of engaging and
enrolling the stakeholders in the operations of the business so as to make them accountable,
responsible, consulted and informed. Stakeholder management is concerned regarding the fit
between the values or the organization and expectations of the stakeholders for determining the
ability of the company to achieve the goals set. Management of the different stakeholders of the
business operating at international level will result in the better execution of the operations by
eliminating the risk of poor communication, negative public reactions, and unfavorable press
(Hawrysz, 2014). For example, Marks and Spencer are using real-time mobile survey tool for
engaging with the line workers of their factories and of their suppliers. The survey was
conducted with more than 60,000 employees in five countries so as to collect feedback from the

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employees regarding the working conditions at the factory. Marks and Spencer have used this
approach for engaging the employees in the operations by meeting their expectations (Gitman &
Enright, 2015).
There is a mutual interdependence between the organization and stakeholders.
Stakeholders help the organization is setting the values, mission, developing strategies,
implementation of the process and enhancing the relationships. Management of the stakeholders
is an essential element which helps in developing knowledge of the people who will get affected
by the decision of the organization. Management of the stakeholders in an effective manner
which helps in minimizing the negative impacts affecting the operations of the global business.
International organizations are dealing with stakeholders who are located in different locations. It
is essential for the business to develop a clear view regarding for whom products or services are
offered, from where resources will be arranged and from where support will be gained for
conducting the operations (Hawrysz & Hys, 2014). For example, My Starbucks Idea is engaging
the creativity of the customers so as to conceptualize the new products or services and enhancing
the quality of the services. This initiative was taken with a motive to enhance the participation of
the customers in the operations of the business. This initiative taken by Starbucks has helped in
managing the customers and their expectations in a better manner (Gitman & Enright, 2015).
The focus of the business needs to be on identification of the expectations of the
stakeholders for the attainment of the objectives of the business. For conducting the operations at
international level, there is a need for the stakeholders and factors affecting the expectations of
the stakeholders. For enhancing the satisfaction level of the stakeholders, there is a need of
communicating with the stakeholders and understanding their needs or expectations of the
organizations. Impact of the different stakeholders differs from each other as it depends on the

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type of stakeholder (Gao & Slawinski, 2015). For example, General Electric is making use of the
human resource department for integrating sustainability into the culture of the company. This
initiative was taken with a motive to gain support from the employees for managing the
operations of GE at the global level in an effective manner (Confino, 2014).
Organizations are using different theories for the purpose of management of the
stakeholders effectively. Stakeholder theory is being used by the international organizations for
meeting the expectations of the stakeholders as well as creating value for the stakeholders.
Stakeholder theory helps in looking at the relationship shared between the organization and the
internal and external stakeholders of the organization. This theory helps in influencing the
manner in which connections of the business are affecting the activities of the business. This
theory states that certain stakeholder competencies need to be developed by the organization.
These competencies include making a commitment so as to monitor the interest of the
stakeholders, development of strategies for dealing with the stakeholders and their concerns,
segregating the interests into manageable segments and making a commitment for addressing the
needs of the stakeholders (Waghmare, et. al., 2016).
Stakeholders of the organization operating at the international level are spread all around
the globe and management of these stakeholders is essential. Management of these stakeholders
will ensure that the performance of the organization is not getting affected. An organization
operating at international level has to consider the interest of the different stakeholders spread all
over the globe. Organizations operating at international level has to ensure that the interest of the
different stakeholders is considered (Ng & Wyrick, 2011). For example, Coca-Cola has adopted
different approaches for the management of the stakeholders and engaging the stakeholders. For
engaging the consumers or customers, hotlines, local websites, research, surveys, social

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channels, regular visits, joint business planning, customer care centers, social media engagement,
focus groups and plant tours are used by Coca-Cola. For engaging the bottling partners, joint
business planning, global environment council, top-to-top senior management forum and day-to-
day interactions are used. For engaging employees, engagement surveys, employee
communications, individual development plans, ethics hotline, town hall meeting and senior
executive business updates are used. For engaging communities, plant visits, community
meetings, sponsorships, lectures at universities and partnerships on common issues are used. For
engaging governments and regulatory authorities, chambers of commerce, recycling and
recovery initiatives and foreign investment advisory councils are used (The Coca-Cola
Company, 2017).
There are various reasons responsible hidden behind the management of the stakeholders
by international organizations. These reasons include free resources, reduction and uncovering
risk, increasing the perception of success and easier project closure. International organizations
are involving the stakeholders in the operations or tasks of the organization by delegating the
task to them. Proactive stakeholders act as an extended team and provide additional resources.
Enhancing the engagement of the stakeholders can result in minimizing the risks for the
business. Stakeholders can help the business in the identification of the new risks. This will help
the business in eliminating the potential impact of these risks on the business and its operations.
Stakeholder management approach helps in analyzing the expectations of the stakeholders.
Support from the stakeholders will be gained with the help of stakeholder management approach
(Maj, 2015).
Success changes of the business increase with the use of stakeholder management
approach for managing the stakeholders. Management of the organization focuses on

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identification of the issues affecting the interest of the stakeholders. Effective management of the
stakeholders of the business provides growth opportunities as well as support to the organization.
With the use of stakeholder management, smoothness of the process of the organization gets
increased. A sense of community is developed with the use of stakeholder management. The
main objective hidden behind stakeholder management is to develop a better relationship with
the different stakeholders of the business. Satisfied stakeholders provide support to the
operations of the business and contribute towards the growth of the business (Matos, et. al.,
2013).
There are various factors which need to be considered by the organizations operating at
an international level so as to ensure that these factors are not creating an impact on the interest
of stakeholders. The interest of the stakeholders is dependent on the different factors. These
factors include the role of the stakeholders in the organization, the risk of losing credibility,
brand considerations, desire for innovation, threats or benefits to their organization and history of
commitment and associated relationships. These factors can support the interest of the
stakeholders as well as negatively affecting the satisfaction level of the stakeholders of the
business Wagner (Mainardes, et. al., 2012).
Thus, from the above discussion, it can be stated that stakeholders are the base for every
organization on which operations of the organization are dependent on. Organizations operating
at international level need to manage the stakeholders effectively so as to enhance the
performance. Stakeholder management can be defined as the stakeholder relationship
management by the organization for addressing the interest of the stakeholders. Impact of the
operations of the organization can be seen on the interest of the stakeholders. There is a need to
analyze the factors which create an impact on the interest of the stakeholders for managing the

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expectations of the stakeholders. These factors need to be considered for enhancing the
satisfaction level of the stakeholders.

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References
Ackermann F. & Eden C., 2011. Strategic Management of Stakeholders: Theory and Practice.
Long Range Planning. Vol. 44. 179-196.
Confino, J., 2014. Best Practices in Sustainability: Ford, Starbucks and More. The Gaurdian.
Accessed on: 07 February 2018. Available at: https://www.theguardian.com/sustainable-
business/blog/best-practices-sustainability-us-corporations-ceres
Gao, J. & Slawinski, N., 2015. The Impact of Stakeholder Management on Corporate
International Diversification. Business and Society Review, Vol. 120, Issue 3, pp. 409-433.
Gitman, L. & Enright, S., 2015. 16 Companies’ Breakthroughs in Stakeholder Engagement.
GreenBiz. Accessed on: 07 February 2018. Available at: https://www.greenbiz.com/article/16-
companies-breakthroughs-stakeholder-engagement
Hawrysz, L. & Hys, K., 2014, Communication channels of middle managers and non-managers
in public sector organisations in Poland. International Journal of Contemporary Management,
13 (2), 72-85.
Hawrysz, L., 2014. Communication as a determinant of an effectiveness of the implementation
of management system based on the quality. Advanced Research in Scientific Areas. Zilina,
EDIS - Publishing Institution of the University of Zilina. 3(1), 41-44.
Maj, J., 2015. Diversity Management’s Stakeholders and Stakeholders Management.
Proceedings of the 9th International Management Conference, Bucharest, Romania.

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Matos, S. & Silvestre, Bruno S., 2013. Managing stakeholder relations when developing
sustainable business models: the case of the Brazilian energy sector.(Report). Journal of Cleaner
Production, 45, p.61.
Ng, E.S.W. & Wyrick, C. R., 2011. Motivational bases for managing diversity: A model of
leadership commitment. Human Resources Management Review. 21. 368-376.
The Coca-Cola Company, 2017. 2016 Sustainability Report: Stakeholder Engagement. Coca-
Cola Journey. Accessed on: 07 February 2018. Available at: http://www.coca-
colacompany.com/stories/stakeholder-engagement
Waghmare, Y. M., Bhalerao, N. & Wagh, S.V., 2016. Analysis of the Factors Affecting the
Stakeholder Management Process in Building Construction Project. International Journal of
Innovative Studies in Sciences and Engineering Technology. Volume: 2 Issue: 7.
Wagner Mainardes, E., Alves, H. & Raposo, M., 2012. A model for stakeholder classification
and stakeholder relationships. Management Decision, 50(10), pp.1861–1879.