A small business's success depends on the actions of numerous stakeholders. Because stakeholders affect the business so greatly, the business has an ethical responsibility to consider how it affects them. A mutually beneficial relationship with all stakeholders will generate goodwill toward a small business, which will lead to lasting success.
Importance of Customers as Stakeholders
Customers depend on the company to supply a product or service. They support the company with every purchase they make, and each purchase also shows the company what products and services to invest in further. In doing so, customers help guide the direction of a small business. Customers also share their opinions and experiences with the customer service department, and they may directly request changes in products or services. Because customers often speak directly with small business owners in their community, these businesses have the opportunity to cultivate a strong understanding of what their customers need or want.
Employees Depend on Companies for their Livelihood
Employees of a small business depend on the business for their livelihood. Contractors may derive a large part of their income from the business as well. Their daily work helps the company to succeed. Thus, a small business might train its employees to improve their skills, preparing them to step into advanced positions as the business grows.
Furthermore, maintaining a positive, productive work environment depends on the cooperation of all employees. Managers must work to oversee daily operations, motivate employees and improve efficiency as needed. Even if a small business owner works alone, she likely depends on family or friends who pitch in to help at a local market, or to set up a website, fulfilling the same functions that employees may later fill. These volunteers may be stakeholders in that they wish to boost their family's income or assume a paid role in the company one day.
Suppliers as Stakeholders
Suppliers provide the raw materials or components that a company uses to create its products. In some cases, suppliers provide finished products. A business may depend on one particular supplier that produces a superior or rare good, in which case the supplier has heightened importance. A small business with a narrow niche may be particularly likely to rely on the specialized materials of one supplier. This also increases the risk to the company and other stakeholders. If the business can't purchase supplies from this source, it may need to dramatically adapt its offerings.
Community and Government as a Stakeholder
The government collects taxes from the company, so it benefits from the company’s profits. It may invest taxes back in society. As a small business grows, it can affect the community in positive or negative ways. A business may provide jobs, and it may contribute funds to local schools and community organizations. Even a very small company can give back in order to generate support and improve the community.
A socially responsible company of any size works to develop more environmentally friendly practices so it doesn’t pollute the community or the broader world, too. Local organizations may advocate for such practices on behalf of citizens and the environment, representing these stakeholders. When a company's activities affect the community directly, such as with many ecotourism ventures, the company has the ethical responsibility to involve community groups and organizations in planning its activities.
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