The Relationship Between Companies and Their Stakeholders

Topics: Management, Customer, Customer service Pages: 7 (2107 words) Published: May 14, 2013
The purpose of this essay is to analyse the relationship between companies and their stakeholders and to determine whether or not good relationships with stakeholders lead to benefits, therefore possibly leading to significant cost savings.

Benefits of good relationships with stakeholders:
Positive relationships with stakeholders lead to several benefits for a company, in many aspects of the work place. Some of these benefits include:

* Conflict resolution
If positive relationships are maintained between management and employees in a company conflict can be maintained. If conflict may arise for example between two employees, managers can resolve the issue quickly and efficiently without upsetting the employees and work can be continued as normal. * Bargaining

A company is able to bargain with their suppliers much easier when there is a positive relationship between the two. This allows both the company and the supplier to get the best deal possible and both parties are happy with the choices and agreement that has been made. * Long-term relationships

It is much more beneficial to a company to have long-term contracts with a supplier rather than short-term. It leads to a strong relationship between the company and supplier and by having a good relationship with suppliers it is more likely they will be willing to agree to a long-term contract with the company. * Customer satisfaction

This research model is a perfect example of benefits that a company gains by having positive relationships with their customers:

Dagger, T, O’Brien, T (2010, p. 6)
* When customers have Confidence Benefits with a company, this means that they know they will get the highest level of service from a provider and feels confident in purchasing from the company. * When customers receive Social Benefits from a company, this means the customer has developed a friendship with the provider and the customer is often recognised by employees. * When customers receive Social Treatment Benefits from a company, this means that they often receive deals or special discounts that ordinary customers do not receive When a company/provider supplies these benefits to customers, the company receives even more benefits in return. The company gains the customer’s satisfaction (the customer feels confident in choosing the company), trust (customer believes the company is trustworthy) and commitment (the customer is committed to the company at a high importance). This also means the company has gained the customers loyalty, which is the most important, the customer will continue to purchase from the company and use their services provided and the customer will also positively recommend the company to their friends. (Dagger, T and O’Brien, T, 2010 p. 23-24) * This model could also be applied to employees, because once you gain employee’s loyalty they will have a higher job satisfaction and productivity is likely to increase.

* Feedback
When good relationships are made between employees and employers/managers, effective feedback and communication is obtained. This allows for employees to feel comfortable in giving feedback on manager's ideas/choices without feeling threatened, and gives managers new ideas and suggestions.

* Problem solving
Effective communication between employees and managers also allows for problem solving to occur much easier. It allows employees to help out and gives their suggestions and it does not leave the manager on their own to try and solve the problem.

* Job satisfaction and productivity
If there are positive relationships between managers and employees the employees will have a much higher satisfaction for their job. This means that they will look forward to go to work and enjoy doing their job, which will lead to increased productivity. When employees are happy in a work place it is much more likely for them to work harder and strive to achieve better, rather than if...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Stakeholders and a Company Essay
  • Ch02 Stakeholder Relationships Student Copy Essay
  • Stakeholder Relationship Governance Essay
  • The Relationship Between Csp and Cfp Essay
  • Relationship Between Management and Leadership Essay
  • Relationship between Kaplan and Norton Essay
  • Stakeholders Essay
  • Essay on Relationship Between Business and Society

Become a StudyMode Member

Sign Up - It's Free