Product Market Stakeholders

Some might think that product market stakeholders (customers, suppliers, host
com
munities, and unions) share few common interests. However, all four groups can
benefit
as firms engage in competitive battles. For example, depending on product and
indus
try characteristics, marketplace competition may result in lower product prices
being
charged to a firm’s customers and higher prices being paid to its suppliers (the
firm
might be willing to pay higher supplier prices to ensure delivery of the types of
goods and
services that are linked with its competitive success).119
Customers, as stakeholders, demand reliable products at the lowest possible
prices. Suppliers seek loyal customers who are willing to pay the highest sustain
able prices for the goods and services they receive. Although all product market
Organizational Stakeholders

Employees—the firm’s organizational stakeholders—expect the firm to provide a

dynamic, stimulating, and rewarding work environment. Employees generally prefer to
work for a company that is growing and in which the employee can develop their skills,
especially those skills required to be effective team members and to meet or exceed
global work standards. Workers who learn how to use new knowledge productively
are critical to organizational success. In a collective sense, the education and skills
of a firm’s workforce are competitive weapons affecting strategy implementation and
firm performance. Strategic leaders are ultimately responsible for serving the needs
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of organizational stakeholders on a day-to-day basis. In fact, to be successful, strategic

leaders must effectively use the firm’s human capital. The importance of human capital to their
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success is probably why outside directors are more likely to propose layoffs
compared to inside strategic leaders, while such insiders are likely to use preventative
cost-cutting measures and seek to protect incumbent employees. A highly important means of
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building employee skills for the global competitive landscape is through

international assignments. The process of managing expatriate employees and helping
them build knowledge can have significant effects over time on the firm’s ability to
compete in global markets.
Strategic leaders
• are people located in different areas and levels of the firm using the
strategic management process to select strategic actions that help the firm achieve
its
vision and fulfill its mission. Regardless of
their location in the firm, successful strategic
leaders are decisive, committed to nurturing
those around them, and committed to helping the firm create value for all
stakeholder
groups. In this vein, research evidence
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suggests that employees who perceive that

their CEO is a visionary leader also believe
that the CEO leads the firm to operate in
ways that are consistent with the values of
all stakeholder groups rather than emphasizing only maximizing profits for
shareholders.
In turn, visionary leadership motivates
employees to expend extra effort, thereby
helping to increase firm performance.