The Relationship Between Companies and Their Stakeholders
Introduction:
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.
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.
References: * Carlopio, J & Andrewartha, G, 2008, Developing Management Skills: A comprehensive guide for leaders, 4th edn, Pearson Education Australia, Frenchs Forest, NSW. * Dagger, T and O’Brien, T 2010, ‘Does experience matter? : Differences in relationship benefits, satisfaction, trust, commitment and loyalty for novice and experienced service users’, European Journal of Marketing, vol. 44, no. 9, pp. 1528-1552, viewed Sunday 20 December 2011, Emerald Database. * Humphrey, N 2010, Small Business Guide, Penguin Books, Camberwell, VIC. * Lozano, J 2005, ‘Towards the relational corporation: from managing stakeholder relationships to building stakeholder relationships’, Corporate Governance, vol. 5, no. 2, pp. 60-77, viewed Sunday 20 December 2011, Emerald Database * Qantas Annual Report 2009, Stakeholder Engagement, viewed Sunday 20 December 2011, < http://annualreport.qantas.com.au/stakeholder-engagement/> * Robbins, S, Bergman, R, Stagg, I & Coulter, 2006, Management, 4th edn, Pearson Education Australia, Frenchs Forest, NSW.