Stakeholder Management in Health Sector

Abstract

Business can survive and grow only when the Society is stable and thriving. Trust is critical, and stakeholders must feel that they can trust the organization and the environment in which they function. Employing stakeholder management in an organization is important as it creates a mutually beneficial relationship between an organization and its stakeholders. Stakeholder theory is based on important principles such as cooperation, relationship building, fairness, integrity, reciprocity, long-term thinking, and win-win solutions. Organizations can only be effective and reach their goals if there is shared meaning between them and their stakeholders. In order to meet demands to decrease costs and errors and increase efficiency and quality, Health care organizations need to become flexible, adaptable and knowledgeable. Any individual or institution affected by the operation of the healthcare industry directly or indirectly is considered a stakeholder. Hospitals are an exceptional case when it comes to dealing with stakeholders as they have to deal with more complex situations and many stakeholders. The environment they operate in is extremely complex, as they operate not in an entirely free market and have to deal with many regulations from the government as well. Patients are the end consumers of a hospital’s services and their experience matters. A well-managed health organization should deal effectively with the social, political and legal dynamics of its environment as well as the more traditional product and market-focused variables found in the economic and technological environment. It could be concluded that the main task of the governance model is to build and maintain conditions, where the actual health care service production can perform well according to the strategy of the organization. These conditions require that different stakeholder expectations are considered and managed to ensure a balanced strategy and stakeholder commitment to any strategic changes. At the same time a risk of leading through compromises need to be acknowledged.