Company Culture and Stakeholder Relationships
The foundations of long-term added value in successful companies encompass involving various stakeholders in decision-making processes. Stakeholders can can be described as the groups or individuals that are affected by the company achieving its aims or that can impact this (Freeman, 1984, p46).
Employees have a special stakeholder role. If they are passionate about the company, they will use their own names and reputations to be ambassadors for their employer. Due to their inside view and experience, enthusiastic employees are very credible messengers to convince other stakeholders of the company's values and concerns. The following quote from Richard Branson (founder of the Virgin Group) clarifies this in relation to a company's stakeholder relationship with its customers.
'Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.'
Motivating employees to become brand ambassadors for their own company affects various stakeholder relationships. For example, motivated employees can allow trust-based supplier relationships to develop with little need for monitoring. Furthermore, enthusiastic employees apply their skills in company-specific volunteer programmes and make positive contributions to society.
Especially impressive is the recruitment potential of enthusiastic employees. Various studies have shown that the quality of applicants is higher, and the number of unsuitable employees is lower, making the recruiting process shorter and cheaper. Social media solutions such as Eqipa allow employees to approach possible candidates in their company's entire stakeholder network quickly and efficiently.
UNIQUE COMPANY CULTURES
In Great Place to Work® benchmark studies, we regularly see that employees act as brand ambassadors when they are enthusiastic about a unique company culture. This kind of company culture is based on employees' pride in their work, trust in management and joy in working with colleagues.
A central building block in a company's culture is made up of its core values. These must be communicated by the company using specific programmes. If this works, enthusiastic employees will have a positive effect on relationships with various stakeholders. Our analyses have shown the following three areas to be especially influential in building a specific company culture:
- Recruitment & hiring: successful companies ensure that applicants suit the company culture even during the recruitment process. Through targeted interviews and observing behaviour, recruiters can be sure that the applicant represents the company's core values. Companies are looking for the ability to think and act within complex stakeholder relationships.
- Inspiration: successful companies use suitable programmes to let their employees experience a sense of purpose and pride in their own work. In the IT and pharmaceutical industries, various companies have online platforms where employees can introduce their specific projects. These platforms facilitate exchange with various external stakeholders and promote the role of employees as brand ambassadors.
- Volunteering: through skill-based volunteering, employees can make their skills available to external stakeholders in the fields that need these skills most. There are programmes in the finance industry where managers can pass their knowledge on to non-profit organisations as volunteers.
This leads to employees positively identifying with their company. This creates brand ambassadors that can get their company's culture across to various stakeholders, forming the foundations for mutual value creation.
Conclusions from the stakeholder's perspective:
- Employees that are enthusiastic about their company's culture are excellent brand ambassadors to various internal and external stakeholders.
- The areas of 'recruitment & integration', 'inspiration' and 'volunteering' include opportunities for mutual value creation for and with a company's stakeholders.
Thomas Schneider & Patrick Mollet
Dr Thomas Schneider is a Consultant at Great Place to Work® Switzerland. He is interested in the influence of company culture on strategic stakeholder relationships within an organisation.
Dr Patrick Mollet is co-owner of Great Place to Work® Switzerland as well as the founder and CEO of Eqipia, the intelligent automatic employee recommendation tool. He supports companies in recruiting and HR marketing.