Which stakeholder group is most important to the company
Which stakeholder group is most important to the company, and why?
Customers are the most important stakeholder group to Primark. Without consumers retail businesses cannot exist because it is the customers who provide revenue for companies. Customers provide word-of-mouth marketing, in other words, customers advertise the company to potential future customers. This means that the more loyal the customers, the better it is for Primark. Consequently, establishing good consumer satisfaction will ensure that Primark should not need to spend a large amount of money for advertising or marketing. According to Freeman “many successful companies recognize the importance of the consumer movement. Such as, AT&T has formed Consumer Advisory Panels to assist them in diagnosing consumer reactions to changes in rate structures and new products and services”CITATION REd84 p 19 l 2057 (Freeman, 1984, p. 19)Who are the company’s stakeholders, and what are some of their issues?
A stakeholder may be defined as an individual or group that affects, or is affected by, activities of a respective business. Some of Primark’s stakeholders are its, shareholders, governments, trade unions, suppliers, customers, non-governmental organizations, workers and communities. Among its stakeholders, shareholders in particular carry an important role in Primark because they affect key decisions and determine the company’s investments. Furthermore, Primark’s shareholders are responsible in fostering ethical business relationships with all its other stakeholders thus increasing the value of the company. Freeman mentions this role of shareholders as having shifted from merely owning stock to having a say in the management of the company CITATION REd10 p 9 l 2057 (Freeman, 1984, p. 9).
Another stakeholder, trade unions, protect the rights of employees such as, learning about their problems and trying to tackle them. They do this with the help of the Ethical Trading Initiative and the International Labour Organization’s Better Work programme. In all companies, customers determine profits, therefore they are as important to the company as shareholders. Furthermore, it is important to note that customers may value ethical trading just as much as the profitability of the products. For example, In China, where Primark sources its products, some workers need support even in meeting their basic daily needs. In this case Primark has had to engage in different organizations to improve them. “The changing nature of employee relationship must be understood for each business” CITATION REd10 p 10 l 2057 (Freeman, 1984, p. 10).