Page 3: The importance of engaging stakeholders
Engaging stakeholders involves establishing good lines of communication between a company and its various stakeholders and then maintaining a constructive relationship with them. Through this relationship, stakeholders can have their say and the company can listen and respond.
The original Cadbury company was set up over 150 years ago by the Cadbury family who believed in fair treatment for their employees and were well known for helping in the community.
They established relationships with their stakeholders by consulting regularly with their employees, responding positively to their needs and aspirations and generally treating them well. This was rare for its day and enabled them to bring several important benefits to the company:
- employees worked hard and were seldom absent
- high morale and good health raised productivity and improved efficiency
- the company gained a reputation as a good employer, making it easier to recruit and retain employees
- the company became renowned for the quality of its goods, customers wanted to supply them and consumers want to buy them
- the company's products became popular with customers who chose to buy their products over and above competitors
- it became easier for the company to expand its activities - communities welcomed its presence among them, suppliers enjoyed working with them and investors were happy to lend money to the company or to purchase its shares.
In the 1980s the company's then Chairman, Sir Adrian Cadbury set out Cadbury Schweppes' commitment to its stakeholders in a booklet called "The Character of the Company" and more recently these views were enshrined in the company's Purpose and Values and its Business Principles.
Today, Cadbury Schweppes continues to listen and work with its stakeholders. It has open and regular conversations with them and what they say and do continues to influence how the company thinks and acts. For example, Cadbury Schweppes maintains a close relationship with its consumers to ensure it is making products that meet their needs. Listening to consumers in this way helps the company to maximise its investment in product research and development and grow its market share.
Engaging with stakeholders helps ensure potential problems are addressed, or changes communicated and understood. For these reasons it is important for companies to find ways and means of engaging with all their stakeholders, including shareowners whose willingness to hold shares underpins a company's financial position. Cadbury Schweppes has the advantage that working closely with stakeholders has long been central to the way in which it conducts its business.