2.3 role + importance of stakeholders Flashcards
what is a stakeholder?
An individual or group that is interested in a business for some reason
what are primary stakeholders?
individuals or groups that are affected by a particular business activity i.e increasing production.
e.g: Customers- Reliable supply of goods. Clear pricing policies. Safe products. After-sales service and technical support.
Employees - Steady and regular income. Safe working conditions. Job security.
Creditors - Repayment of money owed at agreed date. Profitable returns on investments. Minimal risk of failure to repay money owed.
Managers
Shareholders- Steady return on investment (dividends). Investment that does not lose value. Preferential treatment as customers- for example lower prices.
what are secondary stakeholders?
individuals or groups who do not have direct functional or financial relationships with the business although they are affected by, or can influence its actions.
e.g: General public- Steady employment. Avoidance of pollution and noise. Provision of facilities for local community.
Competitors
Activist groups
The media
Government
what is social responsibility?
the duties a business has towards stakeholder groups such as employees, customers and the government.
stakeholder mapping (see graph)
stakeholder power/ interest
keep satisfied, manage closely, monitor (minimum effort), keep informed
when does stakeholder conflict occur?
when different groups have objectives that cannot both be achieved at the same time. For example: workers want to be paid a fair wage but managers want to cut costs.
what is a sole trader?
1 person owning a business
what is a shareholder?
someone who owns a % of a business
what are market conditions?
what is the industry like? how many competitors? etc
what is a social enterprise?
not for profit organisation
internal+external influences on the relationship with stakeholders:
INTERNAL:
management + leadership style
objectives
size + ownership
EXTERNAL:
market conditions
stakeholder power
government policies
what is communication?
the exchange of information or ideas between two or more parties
what is stakeholder engagement?
a process by which managers involve individuals and groups who may be affected by their decisions
what is consultation?
a process by which one group discovers the views of another one
managing relationships with stakeholders:
Partnership: high power/interest Participation: high-low interest Consultation: low power, high interest 'Push' communications: low power 'Pull' communications: low interest
