1.4 Flashcards
what is the definition of a stakeholder?
A Stakeholder is any person or organization with a direct interest in, and affected by, the activities of performance of a business.
what are the two types of stake holders?
internal stake holder and external stakeholder
what is an internal stakeholder?
members of the organization (i.e. employees, managers, directors or shareholders)
what is an external stakeholder?
o not form part of the business but have a direct interest in the organization (i.e. customers, suppliers, Government, etc.)
people. can be both internal and external stakeholders,, can you give two examples of when people are both?
An employee of a business in a Internal Stakeholder because he/she works there but is also a External Stakeholder because he/she lives in the community.
External accountants are considered External Stakeholder but when they start auditing for a business they also become Internal Stakeholder
specific stakeholders have specific interests, could you give them for..
shareholder, CEOS, senior managers, middle managers, supervisors and employees.
Shareholders just focus on the Return of the business.
CEOs focus on develop and coordinate strategies to get returns and profits for the Shareholders.
Senior Managers focus on Strategic Objectives
Middle Managers focus on Tactical Objectives
Supervisors (floor managers) focus on operation objectives
Employees and unions, focus on protecting their rights and working conditions
what could be examples of external stakeholder intrestes?
Government by ensuring the business acts in the public interests.
Suppliers want to maintain a good relationship with the organization
Customers want to get the best good or services that meet its needs
Pressure groups focus oh how the business will affect their area of concern
The media focus on the impact of the business for their stories and news
Local community focus on the impact the business will have in their community
could you give an example where people have have common interest at the same time as different opinions?
Conflict and Benefit-A Pay rise
Basically, employees will be very happy with the rise but shareholder may oppose to it since it will reduce their “stake” of profits.
could you’ve three examples of a conflict in a pay rise discussion?
CEOs and senior managers may be worried they can’t afford the rise and that will have an effect in profits.
Managers might be concerned that they cannot motivate their employees in any other ways but monetarily
Some business in the community might be affected negatively by the rise (i.e. low price supermarkets)
could you give three examples of a benefit in a a payrise discussion?
If the employees are happy the productivity might increase in the business.
When employees earn more the can spend more. The local community will have a benefit.
If employees have more money they can afford better things and might uplift specific markets (i.e. more expensive food)
Since Conflict is more common that Benefit, to deal with the stakeholders’ interests, Leaders need to look at 3 key issues, what are they?
The type of organization in question – for example charity vs. partnership; they have different priorities
The aims and objectives of the business – such as business expansions where the priority will be “the expansion”
The source and degree of power of each Stakeholder group - for example , costumers will have the power if the product is easily substituted.
what is a stakeholder analysis?
Stakeholder analysisis the process of identifying the individuals or groups that are likely to affect or be affected by a proposed action, and sorting them according to their impact on the action and the impact the action will have on them (i.e. How close each Stakeholder is to decision making in the business)
what is stakeholder mapping and why is it important?
Stakeholder mappingis an important step to understanding who the keystakeholdersare, where they come from, and what they are looking for in relationship to the business.
It is a model that assess the relative interest of Stakeholders and their power of influence on a business.
what model do we use to perform stakeholder mapping in the IB?
power-interest model
could you describe the axises on the power-interest model?
power on x axis, low to high but they are switched so low is at top of axis and high at bottom.
level of intrest on y axis, low to left high to right.
