Stakeholders and their influence on services

Abstract

Learning objectives After studying this chapter, readers will be able to: explain the concept of ‘stakeholder theory’ and describe the range of possible stakeholders understand the applications of stakeholder theory to a variety of services appreciate the relationships between stakeholder theory and the quality movement in the management of services understand the roles of managers when servicing stakeholders appreciate the role of ethics and social responsibility when managing stakeholder interests. Introduction The notion that organisations have stakeholders is well established, and a great number of books and articles that address stakeholder concepts have become popular in the management literature. In spite of the availability of this material, considerable evidence demonstrates that the delineation, and treatment, of stakeholders is somewhat arbitrary (Post, 2003). This uncertainty stems from a lack of agreement on the meaning of the term ‘stake’, and subsequently, both broad and narrow definitions of the concept of ‘stakeholder’ have been offered (Donaldson and Preston, 1995). The lack of a consistent definition means that the classification of stakeholders, the interpretation of their relationships, and ideas about how an organisation might respond to the influence and interests of stakeholders becomes problematic (Hummels, 1998). The vagueness of concept and effect is highlighted in the way a bank's board of directors endeavours to address the varied, and sometimes contrary, interests of the bank's stakeholders.