An assignment on

The Value-Creating Relationship Between Stakeholder and Firm

Submitted to
Mr. Mohammad Sawkat Hossain
Lecturer & Course teacher
Security Market Analysis and Portfolio Management (F&B: 307)

Submitted by
Story Mery Gharami (Student Id:1290)
Tonmoy Ghosh (Student Id:1305)
Md.Ovi Hassan (Student Id:1312)
Md Mohaimenul Hoque Chowdhury (Student Id:1313)
Md. Mahmudur Rahman Razu ( Student Id: 1333)
Mohammad Yeasin Hassan ( Student Id: 1346)
Mehran Ali ( Student Id: 2791)
Jinat Jahan Sony ( Student Id: 2816)

Department of Finance & Banking

Jahangirnagar University
Savar,Dhaka-1342

December 10, 2014

Introduction
Scope of the study: The study involves The Value-Creating Relationship between Stakeholder and
Firm. The topic was selected by our Honorable Course teacher and he advices to make a assignment on
it . A corporate stakeholder can affect or be affected by the actions of a business as a whole. The
stakeholder concept was first used in a 1963 internal memorandum at the Stanford Research Institute. It
defined stakeholders as "those groups without whose support the organization would cease to exist."

Object of the study: A clear objective helps in preparation of well decorated report in which
other take the right type of decision. So, identifying objectives is very much important. The
general objective of the study is to understand haw company develop value by creating
relationship with its stakeholders
Some Other object of the study is given below
To know some basic knowledge about stakeholder
To know how firm can manage stakeholder relationship
To know Relation between Stakeholder management and CSR
To know how firm can create welfare for stakeholder that is not
monetary

Methodology: Researchers explain three main purposes of research which are classified as;
exploratory, descriptive and explanatory .Our research purpose is mainly exploratory in nature because
we want to explore the Value-Creating Relationship between Stakeholder and Firm. There are many
important stakeholders for the Firm. These stakeholders are actively involved with the firm. In the
current scenario, managing stakeholder relationship is not easy. This situation is not good for the firm
who want to sustain in the market.

The study has been done mainly based on secondary sources of data or information

Linkage of Previous Study: In our 1st semester we did an assignment titled Identifying the
stakeholder of Jahangirnagar University and finding their Needs This was our course work of
Government Business and society Course mentored By Mr. Md. Tarikul Islam sir

Stakeholders of a Firm
Stakeholders are those who have an influence on organization or being influenced by the achievement
of the organizations objectives. Stakeholders can be groups of people, organizations, institutions and
sometimes even individuals
Stakeholders are mainly 2 types:
Primary stakeholders
Secondary stakeholders

Primary stakeholders:
Primary stakeholders are those who have a direct influence on organization. Primary stakeholder also be
called market stakeholder.

Secondary stakeholders:
Secondary stakeholders are those who have less influence on organization. Secondary stakeholders also
be called non market stakeholder.
In an organization stakeholders can be classified into 2 types.
Internal stakeholders
External stakeholders

Internal stakeholders:
Internal stakeholders are those who are involve with the organization. Manager, employee, staff are
the some example of Internal stakeholders

External stakeholders:
External stakeholders are those who are not involve with the organization. Consumers, pressure groups,
government are the some example of External stakeholders.

Managing Stakeholder Relationship

Stakeholder management is the process of managing the expectation of anyone that has an interest in
an organization or will be affected by its deliverables or outputs. Firm can build or shape stakeholder
relationship by following 5 steeps. They are given below

Identification of all stakeholders

Fix priority to determine importance
Stakeholder mapping
Engagement through effective communications
Monitoring the effect of the engagement

Identification of all stakeholders: Companies have no ability to choose their stakeholders, so the
best any firm can do is to identify their stakeholders. The location, scale and nature of operations will
determine who sees themselves as stakeholders.
Identify consists of three activities:

Developing a list of stakeholders

Identifying mutuality
Categorize: document each stakeholder

Fix priority to determine Importance: It is important to understand that individuals and groups
behave differently in different situations. The impact stakeholders can have on organizational policy,
strategy, and project is dependent on their relationship to either the organization itself or the issues of
concern, or both. Once a list of possible stakeholders has been created it is necessary to estimate their
influence and importance.

Stakeholder mapping: Stakeholders mapping is a process of creating a picture of the stakeholders of

an organization in terms of their power possessions, interests, supporting or constraining behavior etc.
Stakeholder Mapping helps to understand the overall stakeholder community

Engagement through effective communications: Engagement profiles are developed by assessing

the actual attitude of selected stakeholders and the target attitude of these stakeholders necessary for
success of the activity

Monitoring the effect of the engagement: The process of monitoring the effectiveness of
communication involves:

Review of the stakeholder community to ensure that the membership is current the right
stakeholders for the current phase or time;
Review of the stakeholder engagement profile.

Importance of Managing Stakeholder Relation

A firm can develop its Value by creating positive relation with its stakeholder. The Importance
of Managing Stakeholder Relation is given below

Managing Stakeholder Relation is important to and even expected by the public

And they are maintained worldwide

Managing Stakeholder Relation helps organizations hire and retain the people they want

It contributes to business performance

It Protects business self-interest

Value Creation to the Society Trough Managing Stakeholder Relation

Maintaining Stakeholder Relation helps firm to its stakeholders thats belong to the society. It creates
value among its stakeholder like Customers, Employees, Suppliers, Distribution Partners, Government,
Stockholder, media, General Public by delighting and satisfying them
Stakeholders

Value

Value to the Employees

Work safety
Better Life
Good Work environment
Psychological satisfaction
Better Work Experience

Value to the Customer

Improving Lifestyle by providing Quality

goods & Services
Delighting Customer by providing what they
want
Contributing Revenue by giving TAX
Helps government to increase the economic
growth
Developing The standard of life
Helps to increase individual Income
Providing goods and services to the society

Value to The Government

Value to The Society

How Firm Can Create Welfare for Stakeholder That is not Monetary
A firm Can Create Welfare for Stakeholder in both way That is Monetary and not monetary. Though
Monetary Motivation or activities is most effective but non monetary activities are efficient. Some way
of non momentary activities of firm that can be adopted by firm for the welfare of stakeholder is given
below
Stakeholders
Customers

BOD & Top Management

Employees

Suppliers

Distribution Partners

Competitors
Government

Shareholders & Investors

Media
General Public
Trade & Workers Unions

Banks
Business Partners

Main Expectations form the firm that needs no money

Delivering high quality of product
Ensuring accurate quantity
Maintaining high brand reputation

Maintaining Company reputation

Giving independency
expansion of business
Maintaining Company reputation,
Ensuring job security,
Maintaining better working conditions,
Perceived fairness of decision making processes
Showing positive Market growth
Brand strength
Reputation
Providing Constant supplies,
Marinating Brands strength,
Reputation of company,
Better credit terms and conditions.
Positive competition,
alliance on mutual issues and mutual growth
expansion of business
better credit terms and conditions,
Maintain standards,
Job creation opportunities
Responsible to society
companys growth and reputation
Disclosure of pertinent information/transparency
Responsible behavior in social, environmental,
ethical, legal, financial issues
Responsible to society and environment
Job security
More facilities for employees, better working and
Health Safety and Environmental conditions
Better terms and conditions.
More deposits and borrowing
Repay the loan
More business together for mutual growth

Relation between Corporate Social Responsibility and Stakeholder

Relation management

As all stakeholder of a firm belongs to the society so there is a deep relation between
Stakeholder Relation management and Corporate Social Responsibility. Society can be
benefited by the firms Corporate Social Responsibility so is one of the strategy to maintain a
good relationship with stakeholder. If we identify that who are the stakeholder of the firm will
find that Customers, Employees, Suppliers, Distribution Partners, Government, Stockholder, media,
General Public are the major stakeholder of a firm, all of them are the part of the society. So we can say
that if Stakeholder Relation management of a firm benefits its society it can be call a kind of csr

Key Findings
Key Findings of the Report are given below:

Managing Stakeholder Relationship is important for firm to sustain in the market

Stakeholder Relationship can develop some value for firm to the society
There is a Relationship between Stakeholder Relationship and CSR

Reference
Dr Lynda Bourne: STAKEHOLDER RELATIONSHIP MANAGEMENT : 7th Project Management National
Benchmarking Forum PMI Chapter, Rio de Janeiro, Brazil
Mr. Md. Tarikul Islam: Introduction to Government society & Business : Jahangirnagar University
Savar,Dhaka-1342
http://forrestwanderson.blogspot.com/2011/05/seven-tips-for-strengthening.html