To what extent do all businesses need to take the perspectives of all stakeholders into account when establishing corporate aims and objectives? (40)

A stakeholder is any person or group that has an interest in the activities of a business e.g. community, workers, suppliers, customers, government etc. stakeholder power is an important factor when looking at the relationship between a business and its stakeholders. In terms of strategy, what’s important is the power and influence that a stakeholder may have over the business objectives. Shareholders are people or groups who have a financial interest in a company and take a purely financial view of the company. All shareholders are stakeholders, but not all stakeholders are shareholders.

Most businesses are private limited companies which is a type of company that offers limited liability to its shareholders while placing certain restrictions on its ownership. Some private limited companies are majority owned by friends and family of the founder/s such as the Virgin Group. Virgin is not a PLC and do not have to satisfy shareholders whose motive is maximum return on investments, they are more likely to take on the perspectives of stakeholders. This is proven by the Virgin mission statement, “At our core we believe business must be a force for good and use its influence and resources to help find solutions to some of the world's major issues”

It is important for a business to take the perspectives of all the stakeholders into account when they are establishing the corporate aims and objectives of a business because it starts to create bridging social capital for the community meaning members use word of mouth to advertise the company which increases the amount of customers and stakeholders in the business. This is a way to cement relationships and strengthen the community. Bridging social capital creates connections among diverse groups that might not otherwise interact. An example of a business doing this is the co-operative group as they have an open membership to those who share the overall values of the company and are encouraged to play a role in the community. This is a way of bridging social capital as they are trying to get members to work and communicate with people who they might not otherwise interact with. However they are not seen as actively including the perspectives of those who are not members of the co-operative group when establishing corporate aims and objectives as their main aim is to serve their members.

Stakeholders don’t need to be considered when a company is setting new corporate aims and objectives because, although it can be argued that the customer is the most important stakeholder in a company, the people most likely to buy the finished product/service, they need to be kept satisfied but most companies need investments from shareholders to fund their innovations as the business relies upon them. Apple, for example need to keep their stakeholders happy because they are the ones who buy into the Apple brand and keep updating their products when new models are released, for example the IPhone and the new model, the IPhone 5s. Their ultimate goal is to become the leading company in the mobile market, but to reach this goal they need shareholders investing in their business to increase the technology they have in their phones. This would encourage most