Managing relationships between the firm and its stakeholders is difficult because satisfying one stakeholder's needs may come at the expense of another stakeholder.

Question

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This is because different stakeholders often have different, and sometimes conflicting, interests and priorities. For example, maximizing profits may be important to shareholders, but may come at the expense of employee satisfaction or environmental concerns. Effective stakeholder management involves balancing the needs and interests of all stakeholders to create long-term value for the firm.

Managing Relationships Between the Firm and Its Stakeholders Is Difficult