For over 40 years, foreign companies have applied principles and tools that allow them to keep a constant constructive dialogue with their environment: employees, managers, stakeholders, local communities, trade unions, local authorities, suppliers and partners, customers. Business realized the inconsistency of the approach aimed at maximizing share capital, only the financial performance of the company, and turned to those persons who somehow influence the company or who are influenced by the company’s activities – to stake holders.
The company’s interaction with stakeholders demonstrates the company’s readiness to invest in the development, in the future of its customers and employees, partners and suppliers, to ensure the sustainable development of both the company and local communities, to make social investments in areas significant for the territory of the company’s presence, the readiness to develop interaction with those persons who have information and resources to adequately and flexibly respond to external and internal challenges.
The stakeholder approach is implemented by companies of various forms of ownership, various fields of activity, with different needs, values and opportunities. For example, programs aimed at addressing social issues of employees are recognized among leading companies as activities that create value for both the company and its employees and their families. According to experts, identifying stakeholder expectations and clearly articulating long-term goals are essential for the sustainable development of business and society as a whole.
At the same time, a very significant obstacle to the implementation of the stakeholder approach is the difficulty of promoting this idea among the top management of companies and representatives of government agencies. Often, these community engagement programs are viewed not as strategic investments, but as one-off forms of sponsorship or charity.
It seems that systematic stakeholder engagement activities, in addition to project and social risk management, allow companies to gain competitive advantages. An analysis of international practice5 shows that proactive, transparent and systematic implementation of social investments based on advanced standards and methodologies allows integrating the stakeholder approach into the company’s core business and contributes to creating value for both the company and the interacting parties.
The relevance of the stakeholder management model is due to the growing crisis of trust both in the business community and in society as a whole. Fundamental changes in business practices, ethics, methods and forms of doing business have proven the inability of an approach based on increasing shareholder value as the main and only company goal.
The close interaction of companies in different regions with different social economic conditions, different cultural traditions and political regimes forces companies to engage in dialogue with individuals, groups, organizations, communities and other stakeholders who are subject to some influence from the company or who may affect the company’s activities.
The stakeholder approach to company management is the only acceptable model of running business in the context of various interests of interacting groups, requirements of openness and transparency of business, instability in economic and political issues, the need for a flexible and adequate response to market changes, the transfer of power from the “hands of sellers” to the “hands of customers and buyers “.
However, there are very few such companies that are actively engaged in dialogue with all their partners. Most companies, however, see partners as an exclusively opposing side, scrupulously guard their “commercial secrets” and “advanced developments”, and also diligently hide serious internal problems (both current and potential). Involvement of stakeholders in close interaction would allow companies not only to solve current problems with minimal losses, but also to prevent the emergence of new ones or to minimize possible negative consequences.
By no means the overwhelming majority of companies realize the central and critical role of interaction with stakeholders in the area of corporate social responsibility and sustainable development. Out of sight for companies are questions such as: “Is today’s stakeholder engagement (SR) analogous to yesterday’s public relations (PR)?” “How can the stakeholder approach change our“ we have always done this ”approach?”, “Who are they – our stakeholders?”, “Will the stakeholder approach be a new“ headache ”for the company, or an inexhaustible source of value for both the company and partners?”