Unit 2.3- Understanding the role and importance of stakeholders Flashcards
What are stakeholders?
Stakeholders are groups or individuals who have an interest in a business
What are primary stakeholders?
Primary are affected by a particular business activity
What are secondary stakeholders?
Secondary do not have a direct functional or financial relationship with the business but are affected and can influence its actions
Name the 6 stakeholders groups
Shareholders- Employees- Customers- Suppliers- Creditors- Local community
What does social responsibility mean?
the duties a business has towards stakeholder groups
Where is Keep Satisfied on the stakeholder map?
High stakeholder power and low stakeholder interest
Where is Manage closely on the stakeholder map?
High stakeholder power and high stakeholder interest
Where is Keep informed on the stakeholder map?
Low stakeholder power and high stakeholder interest
Where is Monitor on the stakeholder map?
Low stakeholder power and low stakeholder interest.
Why would stakeholder mapping be important?
help a business make decisions in relation to stakeholders needs and their ability to influence it.
What are the influences on stakeholder relationship?
Market conditions Stakeholder power Government policies Objectives Management and leadership styles Size and ownership of the business
What is stakeholder engagement?
A process by which managers involve individuals and groups who may be affected by their decisions in those decisions
What is pull communication?
- If stakeholders choose to engage with business
- Little power and interest
What is push communication?
- One way communications
- Methods such as emails and letters used
- Suited to low levels of power and low levels of interest
What is consultation relationship?
- A process by which one group discovers the views of another
- Used when stakeholders have high interest but low power
What is participation relationship?
- Stakeholders are a part of the relevant team and involved in decision making
- Suited to stakeholders who have high power but little interest
What is partnership relationship?
- Involve the stakeholder more closely on decision or project
- Decisions taken in partnership between managers and relevant stakeholders
What are the needs of shareholders?
Steady return on investment. Investment that does not lose value. Preferential treatment as customers.
What are the needs of customers?
Reliable supply of goods. Clear pricing policies. Safe products. After-sales service and technical support.
What are the needs of local community?
Steady employment. Avoidance of pollution and noise. Provision of facilities for local community.
What are the needs of Creditors?
Repayment of money owed at agreed date. Profitable returns on investments. Minimal risk of failure to repay money owed.
What are the needs of suppliers?
Frequent and regular orders. A sole-supplier agreement. Fair prices.
What are the needs of employees?
Steady and regular income. Safe working conditions. Job security.
