Date post: | 08-May-2023 |
Category: |
Documents |
Upload: | independent |
View: | 0 times |
Download: | 0 times |
7/27/15
Learning Objectives
ü To know what is meant by a stakeholder
ü Be able to differentiate between internal and external stakeholders
ü Analyse and comment on business responsibilities to stakeholders
ü Discuss possible areas of conflict between stakeholders
ü HL – Evaluate ways in which conflicting stakeholder objectives might be recognised and responded to by a business
7/27/15
• Stakeholders are people or groups that have an interest or “stake” in the activities of a business.
• Stakeholders may be able to influence the actions of a business
• Some stakeholders have more influence than others
• Stake holders can be internal or external
• Conflict!
What does it all mean?
7/27/15
Key terms
• Stakeholder concept – the view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders
7/27/15
Don’t get confused
• Shareholder and Stakeholder are two separate things
• A shareholder IS a stakeholder
7/27/15
Stakeholders
Large Business
Small Business
Name some of the stakeholders you may find in a large business and a small business
7/27/15
Internal and External Stakeholders
Internal StakeholdersThese are people who work for the business. This means they are INSIDE the business and
involved daily
External StakeholdersThese are people who do not work for the business, and are NOT involved in the day to day running of the business. As such they
are OUTSIDE
7/27/15
Stakeholders• Internal
• Employees – employment security, wage levels, conditions of employment, participation in the business
• Managers – employment security, salary and benefits offered, responsibilities given
• Shareholders – annual dividends, share price, security of investment
• External
• Suppliers – Speed of payment, level and regularity of payment
• Customers – value for money, product quality, service levels
• Government – jobs created, taxes paid, value of output produced, impact on wider society
• Special interest groups– Banks and other
creditors
– Pressure groups
– Community action groups
• Competitors – fairness of competitive practices
7/27/15
What do stakeholders want?
• Stakeholders are affected by the decisions made by a business
• They will try and get the business to do what they want
E.G– Owners want more profit
– Workers want to work in a nice environment
7/27/15
Business responsibilities to stakeholders
Business responsibilities to stakeholders
Benefits of accepting responsibilities
Customers
Suppliers
Employees
Shareholders
Special interest groups
Competitors
Managers
7/27/15
Business responsibilities to stakeholders
Benefits of accepting responsibilities
Customers • Not to break laws on consumer protection and advertising
• Not taking advantage of vulnerable customers
• Giving customers assurances about quality, delivery dates, service
Suppliers • Effective two way communication• Avoid pressure on smaller
suppliers to cut prices• Pay fair prices and pay invoices
promptly
Employees • Adhere to country´s law• Job training, security, pay more
than minimum wage, involve staff in some decision making
Shareholders • Company law• Annual accounts presented• Actions taken to increase
shareholder value over time
Special interest groups
• Banks – payment s made as required
• Local community – avoid pollution
7/27/15
Competitors • Compete fairly and within the law
Managers • Job security• Competitive salaries and other
benefits• Opportunities for responsibility
and career advancement
Fill in the second part of the table, what benefits to a business are there of accepting these responsibilities?
7/27/15
Task
1. In pairs, create a map of stakeholders for The Churchill College
2. Who do you think has the most influence? – Why?
3. Who do you think has the least influence? – Why?
4. Which stakeholders may argue? Why?
7/27/15
Stakeholder Conflicts
• Business decisions and activities can have both positive and negative effects on shareholders and stakeholders
• Unfortunately the different requirements of stakeholders can cause problems
• This is because there will be arguments about what the business should do
Question
If owners want more profits they may increase prices, customers however, will want lower prices
What should the business do?
7/27/15
BUSINESS DECISION \ ACTIVITY
IMPACT ON:
Employees Local Community Customers
Expansion of the business
Takeover of a competing firm
New IT introduced into production methods