Discuss about the Leadership and Management for Investors and Managers.
The paper talks about the roles of the internal stakeholders as well as external stakeholders. It also explains the principles and strategies of the stakeholder’s engagement in order to improve and enhance the performance of the business entity. It tells that how internal stakeholders and external stakeholders influence the performance of the organization positively as well as negatively.
Two positive ways internal stakeholders influence performance of the business entity
Internal stakeholders include employees, board of directors, investors and managers within the organization. The stakeholders are the persons or groups who have an interest in the business entity to deliver the outputs and result in the organization. They also maintain transparency and viability within the organization. The internal stakeholders influence the effective and efficient performance of the business entity. The internal stakeholders directly affect the growth and success of the company. There are two ways to which internal stakeholders influence the effective and efficient performance and productivity of the organization. They play a significant role to determine the mission, vision, and strategy of the company. In this way, they influence the mission and vision of the company by formulating various types of strategies and policies in the organization. Secondary, they take effective decisions to attain the long-term goals and objectives within the organization. The internal stakeholders are the important part of the each and every company. They influence the behavior of the other people also (Hansen, Dunford, Boss, Boss & Angermeier, 2011).
Further, internal stakeholders exercise power to the other person to do work effectively and efficiently. In this way, stakeholders influence the business activities and operations positively. They help to increase and maximize the revenue of the company. They participate in the planning process to reduce and minimize the risks and challenges of the market. The success and growth of the business entity depend on the performance of the internal stakeholders. They fulfill the resources requirements of the company. The internal stakeholders are involved in various activities and operations of the company. Now it is seen that internal stakeholder affect the performance of the company positively (Beringer, Jonas & Kock, 2013).
Two negative ways internal stakeholders influence performance of the business entity
Although internal stakeholders play a vital role to determine the long-term sustainability and growth of the company but sometimes they affect the performance and productivity of the company adversely. There are various ways to which internal stakeholders negatively influence the effectiveness and efficiency of the business entity. Firstly, internal disputes can be raised among the employees due to inequality and partiality thus it affects the performance and efficiency of the workers. Sometimes disputes arise between the skilled and unskilled person in the organization. Secondary, sometimes the board of directors uses assets of the company for personal purpose, therefore, it affects the efficiency and effectiveness of the business entity (Alniacik, Alniacik & Genc, 2011).
Further, the company delegates the power and authorities to unskilled employees hence they are not able to proper use of the power and authorities due to lack of knowledge and experience. The different salary structure of the employees and managers also influence the profit and revenue of the company negatively. Further, the internal stakeholders are not able to maintain proper communication and co-operation within the organization thus it affects the business activities negatively. As result, it increases the cost of the company. The business entity can attain long-term goals and objectives of the company by improving the performance of the internal stakeholders within the organization. Further, the company should motivate and encourage employees for doing work effectively and efficiently. In addition, the internal stakeholders such as managers are not able to maintain control over the subordinates thus it influences the efficiency and productivity of the company (Bingham, Dyer, Smith & Adams, 2011).
Two positive ways external stakeholders influence performance of the business entity
The external stakeholders influence the business activities and operations positively as well as negatively. The external stakeholders include consumers, regulators, government, suppliers, creditors and communities. These stakeholders affect the actions, policies and objectives of the business entity. The external stakeholders are the end users and customers of the company which determine the long-term success and targets of the firm. Firstly, external stakeholders play an integral role to gain the competitive advantages in the global market. They also maintain sustainability in the organization as well as the environment. Along with this, they reduce and minimize the risk and key challenges of the global market (Wagner Mainardes, Alves & Raposo, 2011).
The external stakeholders keep good knowledge and experience to overcome the competitors globally. In this way, they are considered the key success indicator of the business entity to evaluate and analyze the long-term growth and success of the company. In addition, they maintain a control over the external environment to gain long-term benefits globally. Apart from this, they maintain effective and unique communication with competitors to evaluate and analyze the plans, policies, and strategies of the competitors around the world. Furthermore, external stakeholders also make unique and effective strategies for the business entity to improve and enhance the efficiency and performance of the business entity. Now it is assumed that the external stakeholders are an integral part of the organization in order to fulfill the long-term vision and mission of the firm to improve the productivity of the company (Lovejoy, Waters, & Saxton, 2012).
Two negative ways external stakeholders influence performance of the business entity
Sometimes, external stakeholders influence the business performance and efficiency negatively. There are various ways through which external stakeholders affect the performance and effectiveness of the business entity adversely. Firstly, the government intervenes in the internal business activities and operation of the company thus; it affects the future goals and objectives of the company. It also affects the environmental sustainability of the organization. Further, the company takes loan from the banks and other institute but the company is not able to repay these loan thus it negatively affects the efficiency and performance of the firm. The firm has to face various challenges and key issues in the global market (Fernandez-Feijoo, Romero & Ruiz, 2014).
Further, the company is not able to focus on the entire external stakeholders around the world. It can also affect the business actions and outcomes adversely. Along with this, external stakeholders do not finish the work within the giving deadline thus they have to lose money. It affects the success and development of the business entity. In this way, external stakeholders influence the effective and efficient performance of the business entity. If the company wants to expand and explore its business activities and operations globally then it should focus on the needs, requirements, and expectations of the external stakeholders (Mason & Simmons, 2014).
Two ways external stakeholders indirectly influence the performance of the business entity
The external stakeholders play various roles indirectly to beat the competitors in the market. They are the investors in the company whose actions and duties determine and evaluate the outputs and results of the business entity. They improve the financial performance of the company by maintaining corporate social responsibility and sustainability in the organization as well as the environment. They can predict the future risks and obstacles within the organization. Secondary, the external stakeholders indirectly monitor and focus on the outsourcing activities and globalization. They help to prevent the harmful activities within the organization. Further, they sustain and maintain organization earning growth and success in the universal market. Along with this, they also identify and evaluate the project activities and operations in the organization and they help to reduce the project issues and risks of the market. Now it is assumed that various indirect roles are played by the external stakeholders to determine and improve the performance and efficiency of the business entity. In this way, they influence the success and growth of the company indirectly (Ayuso, Rodríguez, García-Castro & Ariño, 2014).
Human resource implementation strategy
A. Needs of the internal stakeholders and external stakeholders
The internal stakeholders are considered the people of the business entity. They affect the success and growth of the company directly. The employees of the company want meaningful work thus it is primary need of the internal stakeholders in the business entity. The meaningful work can be possible by providing reward and compensation to the internal stakeholders within the organization. Rewards and incentives also provide satisfaction to the employees. Along with this, employees want good working environment and culture to do work more effectively and efficiently.
On the other hand, external stakeholders want to attain and achieve long-term profit and revenue in the global market. It is foremost need of the external stakeholders. In addition, external stakeholders want to attract more customers in the market by fulfilling the needs and requirements of the consumers around the world. Further, they want to gain and increase the profit and revenue in the organization (West & Bogers, 2014).
B.Two principles of stakeholders relationship management
The principles of stakeholders’ relationship management play a vital and crucial role to run the business smoothly. The main aim behind the principles of the stakeholders’ management is to provide guidelines and suggestion to the company and it also maintains a balance between corporate goals and needs of the organizational stakeholders. The two principles of the stakeholder’s relationship management have been discussed below.
- The managers and top management must consider the stakeholder's concerns while taking effective and unique decision within the organization in order to determine the long-term goals and objectives of the firm.
- The top management and managers should communicate with stakeholders effectively and efficiently and they must fulfill the needs and requirements of the stakeholders. It is another principle of the stakeholders’ engagement in the business entity (Mok, Shen, Q., & Yang, 2015).
C.Stakeholders relations strategies
The two stakeholders’ relations strategies to assist and support the business entity in order to achieve the principles of the stakeholders’ relationship management have been discussed below.
- Stakeholders mapping is one of the significant strategies of the stakeholders in order to attain the principles of the stakeholder’s relationship management. This strategy also helps to identify and evaluate the internal stakeholders as well as external stakeholders.
- Communication is also another strategy of the stakeholders in order to build and develop an effective relationship with stakeholders. The firm should set the communication pattern on regular basis to meet the long-term goals, mission, and vision of the firm. These strategies play an important role to accomplish the needs and requirements of the stakeholders within the organization (Henisz, Dorobantu & Nartey, 2014).
D.Two objectives to be achieved by assessing each stakeholder’s relations strategy
HRM plays a vital role to make effective and unique strategies for the stakeholders within the organization. The main objective of the company is to increase and maximize the value of the firm by using the stakeholders’ relations strategy in the organization. Therefore, the firm focuses on the short term profits as well as long-term profits. The other objective of assessing the stakeholders’ relations strategy is to influence the governance of the firm in order to meet the individual goals and objectives. Along with this, the stakeholder’s wants to reduce and minimize the risk and challenges of the company by implementing stakeholder’s relations strategy. In addition, the company uses performance indicators such as grievances mechanism and information disclosure indicator to resolve and reduce the various issues and problems of the stakeholders in the business entity (Luo, Wang, Raithel & Zheng, 2015).
Along with this, stakeholder’s identification and analysis indicator are used by the company to analyze and evaluate the needs and requirements of the stakeholders within the organization. In this way, the company can take the support of the human resource management to build and develop effective strategies of the stakeholders (Barnett, 2014).
On the above discussion, it has been concluded that stakeholders play an integral role in each and every business entity to expand and explore the business globally and to attain long-term profit and revenue in the global market. Therefore, the business entity must protect the rights and interest of the stakeholders within the organization.
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