Building Collaborative Relationships Between Organizations & Their Stakeholders

Building Collaborative Relationships Between Organizations & Their Stakeholders
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  • 0:01 Stakeholder Engagement
  • 1:10 Stages of Relationship…
  • 4:25 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
Companies need to invest time in building collaborative relationships between organizations and their stakeholders. In this lesson, you will learn about stakeholder engagement stages.

Stakeholder Engagement

Companies depend upon their stakeholders' support in order to flourish in the business world. How does a company create positive, supportive relationships with stakeholders? It does not just happen! In fact, a lot of work goes into creating a successful collaboration between organizations and stakeholders. In this lesson, you will learn how businesses can build collaborative relationships with stakeholders through engagement, dialogue and network building.

Stakeholder engagement is the building of 2-way relationships between organizations and stakeholders. In order to say that a company is partaking in stakeholder engagement, they must be working with at least one stakeholder group, such as employees, investors, or the community. Munchie Natural Bars is a manufacturer of healthy food snack bars. They are a relatively new company that is trying to grow their business through developing stakeholder relationships. They know the benefits to stakeholder engagement include higher productivity and the ability to more easily reach corporate goals. Let's see their plan in action.

Stages of Relationship Building

Stakeholders are not immediately in love with a business. Just like in real relationships, a business relationship with stakeholders develops over time through stages. The stages are:

1. Inactive

Munchie Natural Bars' first year after launching the business was in an inactive stage. The company treated their stakeholders with little regard to any problems or concerns. The company preferred to operate as an island and not engage government, community, investors or even their customers. Their only concern was producing and selling bars.

2. Reactive

By the second year of business, Munchie realized that they could not ignore all stakeholders. They were losing investors and receiving poor reviews from their customers. The company entered into the reactive stage, where Munchie only responded to stakeholders when they had to and usually in an unprofessional or defensive way. For example, Munchie had also launched a protein shake to miserable sales. Most stakeholders were pushing for the company to cut its losses and drop the new product. Munchie only agreed to quiet the stakeholders and customers, not because they believed it was a good idea.

3. Proactive

In the third year, a new CEO was hired to try and revive the company's profits and products. The CEO also felt that the company needed to develop proactive relationships with their stakeholders by trying to predict and respond to their concerns. The new CEO, Nate Ural, was able to create an open-door policy that helped the stakeholders communicate directly with management.

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