Considering the concept of free market which is based on free entry and free exit which allows companies to fix their prices and share information related to products with their customers, competitors are important stakeholders. A lot of debate has already taken place regarding the unfair methods adopted by competitors to enter the market place. Such actions not only affect the competitor but also sometime influence the other organization to join the brand war. This calls for establishing a healthy relationship between competitors and businesses as they are hugely dependent on actions of one another by either influencing or getting influenced.
2.4.7 Government
Governance stands for the act of delegating responsibilities and monitoring cause agents who have a desired expectation. Hence the role of Government becomes highly significant as it has to prevent formation of any kind of nexus with business so that other stakeholders are not harmed. The government is expected to formulate laws and facilitate business by providing infrastructure, subsidies, tax holidays, and licenses. It aims to promote healthy competition and promote economic prosperity of nation which is run by business.
The primary responsibility of the stakeholders is to influence the business decisions. One such example is the Shell episode, in which 75% Germans supported Greenpeace (Retzmann, 1996) boycotted the products and services of Shell group in 1995 in response to its decision of disposing the oil platform, Brent Spar by sinking it in the North Sea. This caused decline in Shell’s revenue by 50% at that time but considering the rapid spread of incident in today’s era of information technology, the stakeholders can be assumed to be more tightly connected so a similar incident is expected to cost more revenues.