Managing stakeholders vs. responding to shareholders

The pressure on corporate executives to increase their stock prices and shareholder value in the short‐term has caused them to lose sight of how lasting shareholder value is created in the first place. The enterprise must be managed to meet the needs of all stakeholders rather than making decisions based solely on short‐term shareholder value considerations. The primary management emphasis should be on meeting the needs of our customers and motivating employees to do so. Companies that put their customers first and empower their employees to serve them will inevitably provide greater growth in shareholder value than those corporations that focus primarily on boosting their stock price and only giving lip service to other constituencies. The demands of all stakeholders must be met concurrently. Leaders must juggle the competing interests of their stakeholders – customers and customer’s customers; current employees and those in acquired companies; short‐term and long‐term shareholders; media; local, national, and international communities; government and regulators.