Question

Who is a stakeholder and why are they, and their voices, important? Why should your instructors care about what you have to say? What difference can you, or any stakeholder make by conveying your thoughts to the company you’re a stakeholder in? Is there a better way to reach for a result or action from the company? If you own the company, why should you listen to feedback regarding improvement for the company you have poured you heart, soul, and monies into?

Answer 1

Who is a stakeholder and why are they, and their voices, important?

Stakeholders are those because of whom the company is functional, they are both internal and external example shareholders, customers, employees, suppliers etc.

Why should your instructors care about what you have to say?

The instructor or the management are the agents of the stakeholders and especially the shareholders. They are running the company on their behalf. If the agency problem arises the next time company will not elect the same board in the Annual General Meeting.

What difference can you, or any stakeholder make by conveying your thoughts to the company you’re a stakeholder in?

The stakeholder can take a halt on the company's decision. They can cast their veto and avoid any action or rule from being implemented. The example in the Satyam Computers case the Shareholders asked the company to disclose their merger with another company and wanted to know the reason behind that action.

Is there a better way to reach for a result or action from the company?

Being a stakeholder and especially a shareholder is the best way to reach ou in the decision making of a company. Since with company's equity one buys the ownership a vote and a legal right in the proceedings of the company. However, for large investors, they can even plan strategic mergers, joint ventures or partnership to gain a say in the company.

If you own the company, why should you listen to feedback regarding improvement for the company you have poured your heart, soul, and monies into?

Since at the time of raising the funding we dilute the ownership by way of raising equity we give the outside word a right into the decision making of our company. Further other stakeholders have a major say according to Porter's five forces which clearly highlights the power of customer, supplier etc.