1.4 Stakeholders Flashcards
Who are internal stakeholders?
Individuals or groups that work within the business, such as directors and employees
Who are external stakeholders?
Individuals or groups that are outside of the business,
Are business consultants internal stakeholders or external?
They are the grey area in this theory: They are deemed to be external, but after entering the company for specific assignment, they will have an internal position as well.
Are small shareholders internal stakeholders or external?
They are the grey area in this theory. In general, they are considered internal, but people often very own small shares in many very large companies (as portfolio), where they don’t have neither power nor interest to influence any decision.
Are employees always regarded as only internal stakeholder?
Any internal stakeholder is part of a larger community than a company and their other roles may be external to the company.
What is the purpose of stakeholder analysis?
To set proper priorities, before making decisions:
Large businesses often have complicated and conflicting stakeholder interests. These interests have to be prioritised, in order to make most efficient or ethical decisions.
Which stakeholders are, in general, closest to decision making?
The directors/managers and owners
Which stakeholder are farthest to decision making
Government, media, pressure groups, local community
Which stakeholders are in the medium circle of comparative closeness to decision making?
Who have some kind of contract/agreement: consumers, suppliers, employees, financiers
Are competitors stakeholders?
Controversial:
1. The may have some power over some interest to your business, but as your company has no obligation or interest to satisfy competitors interests, they may be not considered under stakeholders.
2. It can be useful to consider them under external stakeholders, e.g in order that their sudden increase interest or power does not remain unnoticed.
What are the 4 strategies to manage stakeholders under stakeholder mapping tool?
- Minimal effort (towards stakeholders with low interest and low power)
- Keep informed (the cheapest way to satisfy stakeholders with high interest but low power)
- Keep satisfied (stakeholders with power but no interest, so that they don’t become interested to participate in your decision making)
- Key Players
Who are the most powerful stakeholders according to stakeholder mapping tool (those who need to be kept satisfied or the Key players) ?
There is no distinction in the tool for the two groups of stakeholders with high power, but we can argue, that those of them who have more interest, will be more powerful in practice (The key players)
What are the limitation of stakeholder analysis/mapping?
- The analysis and prioritization may be very subjective, depending on the ethics of the decision maker
- Members of particular group may have shifted to more powerful group unnoticed (e.g. a pressure group like environmentalists became better present in the local government gaining more power) or neglected shareholder bought larger share.
How can you describe the situation where directors want larger salaries but shareholder want larger dividends (less costs on salaries)?
Conflicting interests of stakeholders
It satisfies shareholder interests if the company buys new equipment which substitutes a lot of manual work and avoids human mistakes. Who could have a conflicting interest?
E.G. employees who may become redundant (fired)
