Impact of Stakeholders' Analysis on Organizational Performance: A Study of Nigerian Financial Organizations

Impact of Stakeholders' Analysis on Organizational Performance: A Study of Nigerian Financial Organizations

Edwin M. Agwu (Pan-Atlantic University, Lekki, Nigeria)
Copyright: © 2019 |Pages: 17
DOI: 10.4018/IJSDS.2019100104

Abstract

Businesses have grown to the realization that no individual sector can make a significant, sustainable difference alone. Also, several studies have indicated the extensive use of stakeholder analysis within most organizations to improve their businesses. However, this depends on how well organizations can align and fulfill the needs of most if not all stakeholder concerns. This paper is based on a comparative case study of two organizations in the Nigeria financial sector in relation to their stakeholder management practices. The aim is to study the impact of stakeholder analysis on the performance of these selected organizations. The stakeholders of each organization were identified based on their respective mission and vision statements, including their core values and how their stakeholder management practices have impacted on each of their financials and social performances were also examined. The study confirms the importance of stakeholder analysis in the improvement of organization performance and also asserts that the achievement of an organization's set objectives is dependent on how well the organization can represent the interest of its key stakeholders. It was thus concluded that if an organization can align and fulfill the needs of all its stakeholders successfully, its performance can be improved significantly. It is recommended that management of organizations should not only ensure that their business activities are committed to addressing their stakeholder concerns and needs effectively, but must also be committed to the long-term survival of the organizational goals.
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1. Introduction

A business, even a very successful one, cannot exist in a vacuum (Matteson & Metivier, 2015) and this growing recognition has brought businesses to the realization that no individual sector can make a significant, sustainable difference alone but rather has to work collectively with numerous individuals and groups so as to improve its own competitiveness, growth and profitability while simultaneously creating value for the society (Mondi Group Sustainable Development Report, 2013). An organization is therefore not self-contained or self-sufficient. It depends on its environment for needed resources, information or social legitimacy, and these are most often through exchange relationships with its stakeholders (Marcinkowska, 2013). For instance, an organization depends on investors for financing, customers to buy its products, employees to attend to customers and perform other roles, suppliers for raw materials and other resources necessary to run the business, and the community within which they can thrive. Matteson and Metivier (2015) opined that if any of these groups are absent, the business cannot be successful. However, Popa, Oancea- Negescu and Popescu (2012) argued that, though there are numerous situations in which these stakeholders’ rights are affected by the businesses’ activities, sometimes, these stakeholders’ interests may also affect the purposes, objectives and development of these businesses, even to the extent of jeopardizing their existence, especially if a conflict of interest arose between the shareholders and other stakeholders. For many companies, managing their stakeholders represent the key to success in terms of the current economic environment (Popa, et al., 2012; Wu, and Wokutch, 2015); if each of their preferences could be satisfied, the interests of all would be better represented, but this success depends on how well the organizations can align and fulfil the needs of most or all stakeholders, because it is that organization that could do this to the fullest that will be most successful and survive longer (Bourne, 2014). This paper aims to contribute to related literature, with the main purpose of providing more understanding into the link between stakeholders’ analysis and organizational performance with selected Nigerian financial institutions as examples.

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