How does stakeholder power change over time?

Stakeholder power can change over time due to shifts in the business environment, stakeholder relationships, and company performance.

Stakeholder power is not static; it evolves as the business and its environment change. For instance, changes in the business environment, such as new regulations or market trends, can affect the power of stakeholders. If a new law increases the rights of employees, their power as stakeholders increases. Similarly, if market trends favour a company's products, its customers' power may decrease as they have fewer alternatives.

Changes in stakeholder relationships can also alter stakeholder power. For example, if a company develops a closer relationship with a supplier, that supplier's power may increase. This could be due to the supplier gaining more knowledge about the company's operations, or the company becoming more dependent on the supplier. Conversely, if a stakeholder relationship deteriorates, that stakeholder's power may decrease.

Company performance is another factor that can influence stakeholder power. If a company is performing well, its shareholders' power may increase as they have more influence over the company's decisions. On the other hand, if a company is performing poorly, its creditors' power may increase as the company becomes more reliant on their funding.

In addition, the power of different stakeholder groups can change relative to each other. For example, if a company becomes more customer-focused, the power of customers may increase relative to other stakeholders. Similarly, if a company becomes more employee-focused, the power of employees may increase relative to other stakeholders.

Overall, stakeholder power is dynamic and can change significantly over time. Understanding these changes can help businesses manage their stakeholder relationships more effectively.