Unit 1.4 Flashcards
Define Stakeholder
A person or organization who has a direct interest in the business
What are internal stakeholders?
Members of the organization
What are external stakeholders?
Not part of the business
Examples of Internal Stakeholders
Employees
Managers/ Directors
Shareholders
Examples of external stakeholders
Customers
Suppliers
Government
Competitors
Pressure groups
What do internal stakeholders want?
Employees (e.g. teachers)
- High pay
- Working conditions
- Job security
- Promotion
Managers/Directors
- Maximize salary/bonus/perks
- Satisfy shareholders
- Responsibilities
- Maximizing profit
Shareholders
- Maximize share price
- Stable management
- Maximize dividend
What do external stakeholders want?
Customer (e.g. students)
- Reasonable price
- Quality
- Choice
- Sustainability
Suppliers (e.g. aramark)
- Paid on time
- Good relationship
- Regular Contracts
Government
- Jobs created
- Tax paid
- Output produced
- Compliance (following laws)
Competitors (e.g. ISF)
- Competition
- Business strategy
- Comparison
Pressure groups (Normally regarding ethics)
- Follow their vision
- Local community- jobs and social impact
Example of stakeholder conflict
Following situations:
- Employees versus managers
- Customers vs shareholders
- Managers versus shareholders
- General public versus shareholders
Stakeholders Conflict
Employees versus managers : jobs/wages versus bonus
Customers vs shareholders : Product quality/service levels versus profit/dividends
Managers versus shareholders : Growth versus independence
General public versus shareholders : Effect on the environment versus profit/dividends
Examples of resolving conflict
Type of organization
- Partnership may focus on profit
- PPP may focus on social benefit
Aims of the business
- Growth- potentially lower dividends
Power of each stakeholder
- Mass market- customers have power
- Strong trade unions- employees
- Monopoly- owners
Mutual benefit
- Employee share schemes
- Satisfy employees and managers first?
