Business – 1.5 Stakeholders – Relative importance and influence | e-Consult

The aims of shareholders typically focus on maximizing financial returns, often measured by profit margins, share price growth, and dividend payouts. To achieve these aims, shareholders may support outsourcing if it reduces production costs, improves efficiency, and enhances profitability.

Employees, on the other hand, usually prioritize job security, fair wages, safe working conditions, and career development. Outsourcing can threaten these aims by leading to job losses, reduced bargaining power, and potential declines in morale.

When a company evaluates outsourcing, it must balance these competing aims:

• Shareholder perspective: Cost savings, increased competitiveness, higher shareholder value.
• Employee perspective: Retention of skilled staff, maintenance of morale, avoidance of redundancies.

Consequently, a decision to outsource may be justified to shareholders but could face resistance from employees, leading the business to consider compromise solutions such as partial outsourcing, retraining programs, or offering voluntary redundancy packages.