- Stakeholders
- People who can be affected by and therefore have interest or stake in actions of the business
- e.g. shareholder, employees, suppliers, customers, competition, government/state, pressure groups, etc.
- Stakeholder Concept – priority to stakeholders rather than shareholders
- Interests of internal stakeholders vs. interests of external stakeholders
- Internal
- Employees
- Employment security, wage levels, conditions of employment, participation in the business
- Managers
- Employment security, salary and benefits offered, responsibilities given
- Shareholders
- Owners of shares in the company, have decision-making power, receive dividends (share of profit)
- Annual dividends, share price, security of investment
- External
- Suppliers
- Speed of payment, level and regularity of orders, fairness of treatment
- Customers
- Value for money, product quality, quality of service
- Government
- Job creation, tax payments, value for output produced, impact on wider society/economy
- Special Interest groups (SIGs)
- Banks, creditors, pressure groups, local community, trade/labor union
- Care about individual interests: payment of debts, environment, etc.
- Competitors
- Fairness of competitive prices, strategic plans of the business
- Stakeholder conflict
- Not possible to satisfy all stakeholders all the time
- Conflict will always arise from new developments, business activities, etc.
- Stakeholder conflict resolution
- Arbitration
- To resolve industrial disputes between workers and managers
- Advantage
- Both sides agree to an independent arbitrator who will decide th
- Disadvantage
- Neither stakeholder group will likely receive what they want
- Decision is binding
- Workforce Participation
- To improve communication, decision-making and reduce potential conflicts between employees and managers
- Advantage
- Gain cooperation of workers – better motivated and involved
- Disadvantage
- Waste of time and resources to be able to get all information
- Profit-sharing scheme
- Reduce conflict between workers and shareholders over allocation of profits and benefits
- Advantage
- Sharing profits can encourage workers to work in ways that will increase  long-term profit
- Disadvantage
- Reduces retained profits and/or profits paid out to shareholders unless the scheme pays off
- Share-ownership scheme
- To reduce conflict between workers , manager and shareholders
- Advantage
- Provides share options; employees and shareholders benefit and aligns their interests with one another
- Disadvantage
- Administration costs, decreased ownership, qualification constraints may limit motivation
- Stakeholder Map
- A tool to analyze which stakeholders to prioritize for a given issue, mapped in a grid classifying stakeholders in terms of interest and power
Kim De Leon1.4 Stakeholders
