Unit 1 - Exploring Management - Chapter 2 Flashcards
What did Smith say in shareholder theory?
a manager’s primary duty is to maximise shareholder returns
What did Smith say in stakeholder theory?
A manager’s duty is to balance the shareholders’ financial interest against the interests of other stakeholders such as employees, customers and the local community, even if it reduces shareholder return
How did Sternberg critique stakeholder theory - as cited in Phillips et al?
“effectively destroys business accountability … because a busines that is accountable to all is actually accountable to none”
Sketch Freeman’s Stakeholder view of the firm.
Sketch a stakeholder map of concentric circles
What are weaknesses of the concentric map stakeholders model?
Stakeholders may belong to more than one group: internal, external, primary or secondary.
Stakeholder groups tend to be made up of large groups of individuals which may not be homogeneous and may be groups within groups. Power often unequally shared.
Sketch a stakeholder relationship map
Describe 9 C’s stakeholder checklist
Commissioners Those who pay the organisation to do things
Customers Those who acquire and use the organisation’s products
Collaborators Those with whom the organisation works to develop and deliver products
Contributors Those from whom the organisation acquires content for products
Channels Those who provide the organisation with a route to a market or customer
Commentators Those whose opinions of the organisation are heard by customers and others
Consumers Those who are served by the organisation’scustomers, e.g. end users
Champions Those who believe in and will actively promote the project
Competitors Those working in the same area who offer similar or alternative services
Name one big weakness of all the stakeholder map models
The assume that stakeholders positions are fixed whereas in reality they are dynamic and change according to the issue at hand, level of interest and level of influence.
What did Bryson say was the main purpose of stakeholder analysis?
Identify stakeholders and their interest
Clarify stakeholder views of the organisation
Identify key strategic issues
Begin the process of identifying colaitions of support and opposition
Sketch Johnson et al’s power interest grid.
Which quadrant of his power interest grid did Johnson say was the most difficult to plan for - and why?
Quadrant C - the ‘keep satisfied’ group who have low interest but high power. They may appear passive but the level of interest can change suddenly, moving them to quadrant D - key players.
Why should stakeholders in quadrant B - keep informed - of Johnson’s power interest grid be careful management?
They may be vital allies in a broader lobbying strategy to influence more powerful stakeholders.
Sketch Price’s power versus interest grid.
How did Price describe low interest/low power stakeholders?
outsiders
How did Price describe high interest/low power stakeholders?
onlookers - interested in the changes taking place but have very little power or influence.
How did Price describe high interest/high power stakeholders?
Intruders - have the power to support or undermine change and are sufficiently interested to take action if they wish.
How did Price describe low interest/high power stakeholders?
Monitors - individuals or groups that have the power to support or influence your change effort, but not necessarily the interest to do so.
What is a key weakness of the power interest grids?
As with the maps, they assume that groups are static whereas in real life they are dynamic and may be in different positions according to the issue at hand.
What does Scholes caution against in stakeholder analysis?
Ascribing stakeholders more power than they actually posess
Being too simplistic or generic in selection of stakeholders to plot
Being too detailed in selection of stakeholders to plot, leading to analysis being too complex and diffiicult to analyse.
Sketch out an exampe of the stakeholder disposition model
What are Johnson’s sources and indicators of power for internal stakeholders?
Status (e.g. position in the organisational hierarchy)
Representation (e.g. committees they may be on)
Involvement in strateigc decision making
Reputation
Informal Influence
Expertise
Grade or Salary
Claim on resources (e.g. size of budget or number of staff)
Symobl of power (e.g. size and location of office or secretarial support)
What are Johnson’s sources and indicators of power for external stakeholders?
Control of strategic resources
Relative size of shareholdings or loans
Dependence on small number of customers
Reliance on small number of customers
Negotiating arrangements
Status (e.g. is the customer or supplied wined and dined)
At what level is the customer or supplier ‘managed’ by the organisation?
What are primary stakeholders?
Those stakeholders most vital to an organisation - without whom the organisation cannot survive.