Stakeholder engagement

Staff motivation/retention

When an organisation acts in ways that engage employees/workers, then the organisation can benefit from high levels of staff retention and motivation.

For example, if employees are treated well at work – respected, supported, rewarded for the work they do and valued by the organisation – then they will feel far more motivated to do a good job for the organisation in return. In addition, employees will feel happy in their work role, which means that they are less likely to leave the organisation to work elsewhere. Being able to retain staff in this way helps the organisation to keep valuable skills and experience within the organisation (as opposed to talented members of staff leaving the organisation and potentially moving on to work for competitors instead).

Improved reputation

An organisation that is seen to be engaging effectively with stakeholders will benefit from being able to build a positive reputation. If the organisation can communicate effectively with stakeholders and show that they consider the needs/interests of the stakeholders when making decisions, then stakeholders will view the organisation in a positive light. For example, if customers are engaged and satisfied with the way in which the organisation is operating, then they are likely to continue to be customers of the organisation (and they may also recommend the organisation to others).

New ideas

By communicating effectively with stakeholders and listening carefully to their views/insights, an organisation may be able to identify ideas for new business opportunities and/or areas for improvement. Putting these ideas into practice could help to improve the performance of the organisation and also give the organisation an advantage over its competitors.

In addition, if an organisation shows that it has listened to stakeholders and taken positive action as a result, this can have the added benefit of improving the reputation of the organisation.

Increased share prices

If an organisation has shares and shareholders, the price of its shares is directly related to its performance and level of success. As you have learned already, if an organisation is able to successfully engage with and satisfy the needs of its stakeholders, this can have a positive impact on its performance – it has a good reputation, it has happy, motivated staff members, it can generate new ideas to grow the business, etc. This positive impact on performance can help to maintain or increase share prices in the organisation – this is because the organisation is seen as an attractive, appealing investment opportunity for new shareholders (the higher the level of interest, the higher the price). Higher share prices also mean that existing shareholders stand to make more money due to the success of the business – if they were to sell their shares at a higher price than the price they paid for them, then they will make a profit on the money they initially invested.