Analyzing Stakeholder Theory in Contemporary Management Practices

This essay provides an overview of stakeholder theory in contemporary management, defining stakeholders and differentiating between internal and external stakeholders. Internal stakeholders, such as employees, shareholders, managers, and the board of directors, have voting power and influence organizational direction, while external stakeholders, including suppliers, customers, the community, and the government, primarily invest in the organization without direct control. The essay highlights the crucial role of stakeholders in decision-making, financial investments, and monitoring organizational activities. It also explores the impact of various stakeholders on business operations, including customers, employees, suppliers, and government regulations. The essay concludes by referencing the Cultural Web and Charles Handy's model to further illustrate the multifaceted influences on organizational culture and management, emphasizing the need for organizations to consider both internal and external stakeholders for long-term success. Desklib provides access to this essay and many other solved assignments.

Contemporary
Management Theory

Stakeholder is defined as a person who is related to the organization in a direct or indirect
way having interest in the same. Stakeholders can be the employees of companies vendors any
partner or any suppliers because these entire person have an interest in the organization. An
investor of any organization can also be the stakeholder and they are responsible for taking any
decision regarding the actions which also determine the result of the organization. Such
stakeholders have a vital role in determining the future of the organization along with their day-
to-day working (Ioannides, Pantagoutsou and Jury 2021). This essay is related to the
stakeholders as it is well known that they are the important part of organization. It covers the role
of stakeholders in an organization.
It has been found that there are two types of stakeholders in an organization i.e. first one
is internal stakeholders and the second is external stakeholders. Internal stakeholders are
considered as the part of management of the organization because they have the power for
voting. They are considered as the major investors in the organization along with a part of the
board of directors. The stakeholder holds all the powers as they are the part of higher level
management. External stakeholders are the person having major role is to invest oldest invest in
the organization. They do not have a power to bring any change in the directions of organization
(Laszlo, E., 2021). Along with this they are also not allowed to take part in the internal
operations or decision making process of the organization. Employees, Shareholders, managers,
Board of Directors are the examples of internal stakeholders. External stakeholders include
suppliers, customer, community, Government and many more.
Stakeholders are also the part of a board of directors which state their involvement in a
decision-making actions and processes. They have power to direct the management. Along with
this it can be said that they have power to overtake the certain departments such as human
resources research and development and many more which ensure the success of the
organization.
As mentioned above that stakeholders also do investment in the organization. Hence they
have a power that they can bring in or take out money at any time from the organization. The
decision of stakeholder regarding the money is a totally depend on the financial performance of
the organization. The stakeholders can ask regarding the financial reports of the organization
along with the pressurizing the management for changing the practices if required (Safarnezhad
and et. al., 2021). It has been found that some of the stakeholders can even increase or decrease

the investment to change the share price in the market and does make the conditions favorable
for them.
The most important role of shareholders in the organization is a helping in the decision
making process. Stakeholders are considered as the major part of the board of directors. They
have to take the decisions together with The Other Board members of the organization. In order
to to disrupting the decisions, stakeholders please an important role (Obradović, Todorović and
Jovanović 2021). They provide several of Ideas to the management so that they can obey them
and meet the organizational goals and objectives. In addition to this the stakeholders also have
right to appoint senior level management which is responsible for taking all the major decisions
in the organization. The decision of liquidation and acquisition is also taken by the stakeholders.
Largest cold desert considered as the major stakeholders of the organization which plays
a vital role in monitoring the overall activities performed in the organization. They also
developed several rights regarding humans and environmental laws. Along with this monitoring
of outsourcing activities have been done by the stakeholders (Mahini and Raayat Jahromi 2021).
They also have power to vote against the decision which is taken in the business if in the case it
harms the long-term goals of the organization.
Short it can be said that a stakeholder is a primary role which is helpful for the
organization in meeting the strategic objectives by making contribution of their experience and
perspectives towards project. Stakeholders such as suppliers are responsible for providing the
required materials and resources. It is necessary to have a their support to make the project
successful. External stakeholders and do not have any personal interest as they do not have
invested money or funds in the organization. They do not have any right to vote for any decisions
regarding the organization or its working.
Internal stakeholders generally have a financial interest in the organization. These
stakeholders always take the interest in the success of organization as they had invested funds in
their operations (Stam and Pernu 2021).
It is well known that every business exist only to serve their customers. Customers are the
external stakeholders of agribusiness organization as they impact the performance of overall
organization. If the customers of an organization stopped buying products and services, it result
in the huge losses of the organization (Mogaji, E., 2021). Employees also have a direct stake in
the organization because they plays an important role in generating the income of the

organization. On the other hand the employees also have a the health and safety interest along
with the monetary interest which is depend on the nature of business. Employees refers to those
person which perform all the business activities and operations at workplace. It means creation
of income in an organization is only done by Their employees. The performance of employees
directly impact the overall performance of the organization.
In short, it can be said that all the stakeholders has a vital role because of several number of
reasons. Internal stakeholders have the ability to work together which leads to the meeting of
organizational goals and objectives (Hornung, Höge and Unterrainer 2021). External
stakeholders affect the business in direct way. For instance thinking in the behavior of
purchasing of customers, change in the manufacturing of products which are supplied by
suppliers and change in distribution practices, modification in laws and regulations of
government.
Organizational Management is a highly influenced by the prospective and opinion of the
stakeholders whether they are internal or external stakeholders are the group of people which
impacted the the operations of the organization.
Owner plays an important role in a decision-making regarding the activities of the
operations in the organization. Along with this they also provide funds the to the organization
which helps in starting and growing the operations. Hence it can be said that owners or
shareholders of the organization influence the objectives of business goals topper are responsible
for making suggestions or recommendations on the decisions which are factor the activities of
business (Fathbaqali and et. al., 2021). The employees may do not have a the influencing power
as a such that the owners and managers have a butt they also affect the business directly. If the
employees of organization refused to complete the task or not working, it will highly influence
the organization. Customer provide feedback to the business organization and suggest them how
to improve their products and services. Customers how the power to influence The Other by
recommending the products and services of a specific organization or they have the power to
warn the other people against using the products of the specified business organization. Any
change in the quality of the products which are supplied by the suppliers implies the effect on the
business operations of the organization. Along with this it is also found that if any business
organization is affecting the local people in a negative manner. They also affect the organization
as they will not support to the people to buy their products and services (Sutherland, K.E., 2021).

Government also have power to affect the business operations of an organization by changing the
tax level or passing the new laws.
The Cultural Web is a tool which is used to map the culture of an organization and it is also
consider as a way of seeing and understating the different influences that affect organizational
culture. It can be used to map existing culture and it can also used to map future
culture based on the question: ‘What does the culture need to look like to make
this change happen’? The two maps can then be compared in order to promote
discussion and highlight what, where and how change can be implemented (Ding, L., 2021).
Charles Handy's model state that there are four types of culture in an organization which
include power culture, role culture, task and people or person culture. A centralized culture
which focuses on key decision makers is known as power culture. It may occur in small
businesses where the founder dominates; may come under stress if a business grows and cannot
all be run from the centre.
More formalised culture with jobs having clear rules and procedures is defined as role
culture. Individuals know their position within the hierarchy. Task Culture is a culture where
there is a focus on specific tasks and projects. Individuals are brought in to work on tasks as and
when they are required, sharing ideas across functions. It may occur in organizations such as
design and advertising agencies. Under people culture, Individuals have considerable freedom to
act independently. It may occur in organizations such as legal or medical practices where
individuals have high levels of specialist technical expertise (Sørensen and et. al., 2021).
From the above essay it has been concluded that the internal stakeholders are considered as
the key management of the company. Hence it is necessary for the organization to consider them
as serious. The organization provides them a set of special rights and duties. It is necessary for
them to take the interest in the organization for the better future and success of the company.
Furthermore it has been also analyzed at external stakeholders also plays a vital role in the
success of organization but they do not have any right or duties regarding the decision making in
the organization. External stakeholders also have a importance over the organization but it is
always less than the internal stakeholders (Baylis and et. al., 2021). But ignorance of these
stakeholders leads to the facing of several issues for the organization. Above essay state that the
internal stakeholder directly effect the operations of an organization as they have power of
making decisions related to the operations or management operations. Whereas external

stakeholders Impact the organization in indirect way as they do not have power of interfering in
the management operations.
REFERENCES
Books and journal
Baylis, J., Booth, K., Garnett, J. and Williams, P., 2021. Contemporary Strategy: Theories and
Policies (Vol. 16). Routledge.
Ding, L., 2021. Employees’ challenge-hindrance appraisals toward STARA awareness and
competitive productivity: a micro-level case. International Journal of Contemporary
Hospitality Management.
Fathbaqali, A., Maghsoudi Tilaki, M. and Hedayati Marzbali, M., 2021. Reflection of social
structure in the spatial configuration of housing with emphasis on the theory of spatial
syntax (Case study: Traditional and contemporary houses of the historical cultural
context of Tabriz). Journal of Geography and Environmental Studies, 10(2), pp.47-64.
Hornung, S., Höge, T. and Unterrainer, C., 2021. Ideologies at work in organizations: An
emerging critical perspective and reflexive research agenda. In Eurasian business
perspectives. Proceedings 29th EBES Conference (pp. 165-182).
Ioannides, E., Pantagoutsou, A. and Jury, H., 2021. Contemporary artworks as transformational
objects in art psychotherapy museum groupwork. The Arts in Psychotherapy, 73,
p.101759.
Laszlo, E., 2021. Introduction to systems philosophy: Toward a new paradigm of contemporary
thought. Routledge.
Mahini, G. and Raayat Jahromi, M., 2021. Adorno's" Culture Industry" Theory and its Relation
to Contemporary Iranian Music. Journal of Philosophical Investigations.
Mogaji, E., 2021. Contemporary Issues in Brand Management. In Brand Management (pp. 241-
255). Palgrave Macmillan, Cham.
Obradović, V., Todorović, M. and Jovanović, M., 2021. Environmental Project Management:
Contextual Enablers and Boundaries. In Research on Project, Programme and Portfolio
Management (pp. 81-89). Springer, Cham.
Safarnezhad, M., Farahani, A. and Hamid, G., 2021. Paradigm Model of Development of Sports
Research Application (Case Study: National Research). Contemporary Studies On Sport
Management.
Sørensen, E., Bryson, J. and Crosby, B., 2021. How public leaders can promote public value
through co-creation. Policy & Politics, 49(2), pp.267-286.
Spencer, D., 2021. 1 Architectural Deleuzism: Neoliberal Space, Control and the ‘Univer-City’.
In Critique of Architecture (pp. 30-60). Birkhäuser.
Stam, D. and Pernu, J., 2021. Clinical implications for cardiovascular compromise in patients
with spinal cord injury: A case study of autonomic dysreflexia, cardiac pacing
abnormality, and orthostatic hypotension in contemporary physical therapy
management. Cardiopulmonary Physical Therapy Journal, 32(4), pp.167-177.
Sutherland, K.E., 2021. Strategic Social Media Management: Theory and Practice. Palgrave
Macmillan.
Taboada, G.F., 2021. Application of Graph Theory in Workplace Design. Lean Management
Solutions for Contemporary Manufacturing Operations, p.1.

Xuqun, Y., 2021. Establishing a Teacher Performance Evaluation System Geared to the
Cultivation of Character: With a Reflection on New Public Management Theory. Social
Sciences in China, 42(1), pp.135-157.