Roles Of Stakeholders In Strategic Decision-Making Of Microfinance Organizations

Abstract

Microfinance organizations provide financial services to low income people. These organizations have been increasing dramatically worldwide. This increment calls attention for these organizations and their boards to make strategic decisions which enable them perform well and compete with each other. Based on literature, this paper identifies six types of microfinance stakeholders who sit on boards. These are clients, employees, government, donors, creditors and owners. This paper discusses the different roles of these stakeholders when they sit on boards of microfinance organizations and these roles are further explained to show how they contribute to the process of making strategic decisions. Literature on boards, strategic decision-making and stakeholder theory are used as guides in showing how microfinance stakeholders on boards can be advantageous to these organizations, specifically in strategic decision-making. Practical implications, propositions and areas for future research on stakeholders and strategic decisions in microfinance organizations are identified and encouraged.