Companies seeking to practice social responsibility recognize obligations to multiple “stakeholders” in their internal and external environments. Daft and Marcic described a stakeholder as “any person or group within or outside the organization that has a stake in the organization’s performance”, and the GIIRS explained that the term “stakeholders generally refers to any individual or group that, either positively or negatively, impacts or is impacted by the decisions and action of an organization”. Organizations generally can identify a number of different stakeholders and each of them has their own unique and specific interest in the organization, its overall performance and the way in which it interacts with and treats its stakeholders. The list of stakeholders for any organization, as well as their relative importance to the organization at a given time, is unique and will depend on a variety of factors such as geography, industry, size, business model and the stage of growth.
Daft and Marcic noted that owners, investors and shareholders, employees (managers and non-managers) and workers throughout the supply chain (and their elected representatives, if any), customers and clients, suppliers, vendors, distributors, contractors and other key business partners (e.g., lenders and insurers) are considered to be a company’s primary stakeholders, without which the company would not be able to survive. However, other stakeholders can also be very important to a company: governments (local, provincial and national) and intergovernmental bodies, which provide the licenses for businesses to operate and establish, interpret and enforce the laws and regulations under which businesses must conduct their affairs; the community, which includes local government, the natural and physical environments and the quality of life provided to residents in the areas where the company conducts its business; special interest groups, which include industry and trade associations, political action committees, social activists, cooperatives, professional associations and consumer interest groups; creditors; for- and non-profit partners (i.e., “strategic partners” such as universities and research institutes) that provide support and collaboration on development of new technologies, products and processes; the “media”; competitors; and non-governmental organizations (“NGOs”), international organizations and other affected by the activities of the business.
Stakeholder engagement is the formal and informal ways of staying connected to the parties who have an actual or potential interest in or effect on a company’s business (i.e., the company’s “stakeholders”) and noted that “engagement” implies understanding their views and taking them into consideration, being accountable to them when accountability is called for, and using the information gleaned from them to drive innovation. Stakeholder engagement is related to the fundamental principle of CSR that calls for companies to acknowledge that their businesses do not and cannot exist in isolation and rely heavily on their relationships with customers, employees, suppliers, communities, investors and others. Stakeholder engagement is more than just listening, although that is obviously very important, but extends to forging working alliances with stakeholders to pursue and achieve mutually agreed results. Stakeholder engagement is about building relationships with the parties that are most important to sustainability of a company’s business. Companies that fail to pay attention to the concerns and opinions of their stakeholders can suddenly find themselves confronted with an array of problems that go to the very heart of their businesses. When companies are unresponsive to their customers, they begin to lose business and revenues tumble. Companies that do not pay attention to the needs of their employees are unable to recruit and retain the talent necessary to remain competitive. Failing to explain strategies and financial performance to investors jeopardizes the availability of capital.
Articles in Journals
Government and Other Public Domain Publications
 R. Daft and D. Marcic, Understanding Management (5th Edition) (Mason, OH: South-Western Publishing Co., 2006), 132.
 R. Daft and D. Marcic, Understanding Management (5th Edition) (Mason, OH: South-Western Publishing Co., 2006), 132-133 (citing D. Wheeler, B. Colbert, and R. E. Freeman, “Focusing on Value: Reconciling Corporate Social Responsibility, Sustainability, and a Stakeholder Approach in a Networked World”, Journal of General Management, 28(3) (Spring 2003). 1; and J. E. Post, L. E. Preston, and S. Sachs, “Managing the Extended Enterprise: The New Stakeholder View”, California Management Review, 45(1) (Fall 2002), 6).
 P. Hohnen (Author) and J. Potts (Editor), Corporate Social Responsibility: An Implementation Guide for Business (Winnipeg CAN: International Institute for Sustainable Development, 2007), 76-84. See also Stakeholder Engagement: A Good Practice Manual for Doing Business in Emerging Markets (Washington DC: International Finance Corporation, 2007) and From Words to Action: The Stakeholder Engagement Manual (Cobourg, Ontario, Canada: Stakeholder Research Associates in collaboration with AccountaAbility, and the United Nations Environment Programme, 2005).