Abstract The purpose of this paper is to identify and analyze stakeholders’ involvement in the organization. The paper is comprised of four sections. These parts have been discussed in an essay format. The first part discusses the various definitions as well as the topologies of stakeholders as described by different researchers. The second part describes what accountability to stakeholder means in an organization and why should government consult different groups (stakeholders) before and during the process of accomplishment of goals and objectives. Poverty eradication, building democratic nation, discouraging crisis, environmental protection, health living in the case of HIV/AIDS positive individuals and mounting national knowledge are issues of particular interest that UNDP in collaboration with global governments and Assessment Development Results Groups are motivated to work on.
Apparently, the organization (UNDP) has helped much in learning of stakeholders’ relationship and has been comprehensively discussed in the paper. IntroductionGrant Savage et al (1991) states that for an organization to deal with the environmental instability, mangers should involve responsible stakeholders. Stakeholders are individuals, groups and organizations who are either linked directly or indirectly to the organization’s accomplishments and perhaps have the power to influence these achievements.
However, this definition does not include those who are affected by company’s strategies during accomplishments of the objectives. Therefore, this may not be a comprehensive definition of a stakeholder. A stakeholder incorporates issues on organizational strategy, political environment of the organization, human resource management as well as social responsibility. Potential stakeholders corporate with managers of the organizations and provide supporting measures as well as diverse sanctions to enhance fresh perspectives of undertaking public issues in the competitive global world. Michelle Greenwood (2001) defined a stakeholder as any group of individuals or organizations that may affect or be affected during accomplishment of organizational objectives and goals.
They are actually risk holders when it comes to either financial or human capital and thus they will have something to gain or lose when the goal of the organization is achieved in the long run. In categorizing the stakeholders, one should consider the following; 1) organization’s direction, 2) its behavior, 3) system and process and 3) the outcome (Freeman, 1994). Why should we need to focus on these parameters?
There are those stakeholders that influence direction of the organization, for instance, those that enact policies that will impact on employees; there are also those who affect behavior, processes as well as the outcome in the organization. In describing the topology of stakeholders, we need to assess the normal attributes that the stakeholders usually have on organizational objectives. The three attributes that analyze their perception include power to manipulate, legality of their endorsement and the necessity of endorsement (Mitchell et al, 1997). This is clearly elaborated in the diagram below.
Topologies of StakeholdersIn any organization, we have three core stakeholders, dormant stakeholders, discretionary stakeholders and demanding stakeholders. According to Jacob Rendtorff (2009), dormant stakeholders have strong power and perhaps will affect the organization to work very urgently and legitimately. Dormant stakeholders include both expectant and definite stakeholders. They both have power to manipulate the accomplishments in legitimize way in the organization. The collaboration between dormant stakeholders and discretionary stakeholders will form a dominant partnership in the organization. Dominant stakeholders play a major role in maintaining the positions of boardroom as well as in the offices of public relationships in the organization.
Some other departments that are directly influenced by dominant stakeholders include ethics committee department, accounting department, risk management, finance department and public relation department. Discretionary Stakeholders are those stakeholders that demand power from the authority concerned so as to manipulate the actions in the organizations. But they are also legally corporate party to the organization (Jacob Rendtorff, 2009). Discretionary Stakeholders may be are from corporate sponsorship thus they make the image of the organization more legitimate. They collude with demanding stakeholders to form dependent stakeholders.
Dependent stakeholders are the subset of the two core stakeholders (demanding and discretionary) and have no power to manipulate but they possess an imperative and lawful claim on the organization. For instance, if an organization needs to damage the actions of responsibilities, they need to seek legitimate power from the authority. Demanding stakeholders neither have power nor legitimacy to manipulate the actions in the organizations. However, if the organization allows democracy, they usually air out their suggestions and opinions to the corporate strategy.
Demanding stakeholders and dormant stakeholders join together and for dangerous stakeholders. Dangerous stakeholders normally are the group of stakeholders who have claims of power as well as urgency thus uses coerciveness to develop stakeholder claims (Mitchell et al, 1997). Why do the organizations measure corporate performance? This is a question that was well answered by Rasche and Esser, (2006) when he stated that the measure helps to identify firm’s strengths and weakness, and develop efficient strategies for improving these strengths and cure the weakness. While undertaking this process therefore (measurement of corporate performance), accountability of stakeholders are realized in accomplishment of organizational objectives and goals. Tracy Swift (2001) considered accountability to refer a validation of one’s power to perform a given duty legally.
This takes route between two parties where a duty is created and the one who is liable justifies actions that need to be taken to accomplish the goal and the granted party is owed. Accountability is also concerned with how managers cover their actions to the stakeholders in the organization. Entrenched from accounting, morals and supremacy, accountability comprise of group governance and leadership (Solomon, 2007; Rasche and Esser, 2006). Apparently, there are three types of accountability that is experience at different levels of the organizations.
In the management level, managers are required to meet the terms of societal customs by keeping their promise to external environment (customers and suppliers) fulfilled always. In the governance level, executives need to monitor and ensure that managerial responsibilities are completed in the rightorder (Solomon, 2007; Rasche and Esser, 2006). From this we can say that accountability will help in re-assignation of duties by managers and directors in the organization.
Generally, accountability greatly influences managerial behavior in the organizations (Solomon, 2007). Most of non-profit organizations have multiple stakeholders rather than shareholders. The non-governmental organizations stakeholders include the government, benefactor (donor), recipient (beneficiary) and the voluntary group/s to the organization. There are three reasons of stakeholders’ accountability namely; stake-based, right-based and duty-based reasons as acknowledged by Werhane and Freeman (1997). Interest/stake-based examines the how the organization deals with the stakeholders, the right based explores how equity in terms of resources and opportunities are dealt with in the organization while duty-based measures and accommodate accountability portions of stakeholders in the organization.
Therefore, the management should critically reconsider the stakeholders’’ interest and be conventional in managing the changes.