Chapter 5 - Strategy, Governance & Power

Question 1

What is a stakeholder?

Answer 1

Any group or individual who can affect or is affected by the achievement of the organisation’s objective (Freeman, 1984)

Question 2

What is the 4 types of stakeholders?

Answer 2

Potential for threat/potential for cooperation

High/high: mixt
High/low: non supporter
Low/high: supporter
low/low: marginal

Question 3

What values do the 5 classic stakeholders have?

Answer 3

Shareholders: value/profit
CEO: value/growth
Employees: employment/conditions/salary
Suppliers: growth/stability
Clients: satisfaction

Question 4

Explain the concept of dual power within corporate governance

Answer 4

Dual power is when the power is shared between the shareholders and the CEO. The shareholders have controlling power, and the power to fire the CEO. However, the CEO has managerial power and is the head of daily operations. This is to impose a control on the CEO to ensure that he acts in everyone’s best interest.