Chapter 3: Business Stakeholders’ Interactions and Needs Flashcards
Define a stakeholder and give some examples
A stakeholder is an individual or group who has an interest in what the organisation does.
Examples include shareholders, managers, customers suppliers employees, the government etc
What are the three categories of stakeholder?
- Internal - internal parties such as employees and managers
- Connected - have dealings with the firm such as customers and suppliers
- External - no direct link to the firm such as the government and community
What are the needs of internal stakeholders?
Pay, working conditions, status and job security
What are the needs of connected stakeholders?
Shareholders need steady flow of income
Customers need satisfaction
Suppliers need to be paid promptly
Finance providers need the business ability to repay
What are the needs of external stakeholders?
The community needs to know if the if their lives will be affected by decisions
The environment should not be affected
The government need legislation to be met
Trade unions need an active part in the decision-making process
Define primary and secondary stakeholders
Primary stakeholders are any connected or internal stakeholders. They have a contractual relationship with the business. E.g. employees and directors
Secondary stakeholders are any external stakeholders. They have an interest in the organisation but no contractual link. E.g. public
Define primary and secondary stakeholders
Primary stakeholders are any connected or internal stakeholders. They have a contractual relationship with the business. E.g. employees and directors
Secondary stakeholders are any external stakeholders. They have an interest in the organisation but no contractual link. E.g. public
What is the most common conflict between employees and managers?
Wages as employees want a higher wage but managers want cost efficiency
What are the four most common conflicts between stakeholders?
Employees versus managers – wages
Customers versus shareholders – product quality
General public versus shareholders – affect on the environment
Managers versus shareholders – independence
Use Mendelow’s power-interest matrix to determine what level of interest and power a stakeholder has if you show them minimal effort
Low level of interest and low level of power
Use Mendelow’s power-interest matrix to determine what level of interest and power a stakeholder has if you keep them informed.
High-level of interest, but low level of power
Use Mendelow’s power-interest matrix to determine what level of interest and power a stakeholder has if you keep them satisfied
Low-level of interest but high-level of power
Use Mendelow’s power-interest matrix to determine what level of interest and power a stakeholder has if you keep them satisfied
Low-level of interest but high-level of power
Use Mendelow’s power-interest matrix to determine what level of interest and power a stakeholder has if they are key players.
High-level of interest and high-level of power
Use Mendelow’s power-interest matrix to determine what level of interest and power a stakeholder has if they are key players.
High-level of interest and high-level of power
