stakeholders

Stakeholders

Internal stakeholdersEmployees - Job security, working environment.

• motivation makes dynamic and loyal workers.

Shareholders (stockholders) - Maximize dividends, achieve capital gains

Managers and directors - Maximize profits, achieve fringe benefits, look after long term health of organization.

External stakeholders

Suppliers - Strive for regular contracts at competitive prices, try avoid long credit periods.

Customers - ‘Customer is always right’ , Provide business with most of its revenues

Competitors - Stimulus to innovation and product development.

Government - Avoid unfair practices, ensure health and safety

Special Interest Groups (SIG’s)

Trade unions

Uphold and enhance the conditions of work for members

!Campaign for: Wages and salaries, introduction of minimum wage, better working conditions etc.

Pressure groups

Special Interest Groups (SIG’s)

Consist for individuals with common interests who wish to influence change in the organization.

!Try and influence government policies with the

support of the general public. !

Actions include:

BoycottingLobbying

Public relations

Special Interest Groups (SIG’s)

Industry trade groups Local community

‣ Specialize in promoting aims of particular industries. !‣ Funded by organizations that operate in that industry. !

Eg: Anti - piracy campaigns. !‣ Trade associations - Promote products of an industry. !

Eg: Farmers’ association collaborating to promote benefits of eating fruits and vegetables.

‣ Place demands on the businesses that operate in the community. !

Includes: !• Job creation. !

• Consideration of local environment. !

• Increased variety of products at cheaper prices. !

• Sponsorship of local events.

Funding

Public opinion

No. of members

Commitment

Success

Should firms be afraid of SIG’s?

Power of the SIG - Greater power = greater influence.

Market power of firm - More monopoly power = less reaction to SIG.

Compliance costs.

Stakeholder views - With respect to firms image.

Objectives with respect to CSR.

Stakeholder conflict

Managers make decisions which may address the interests of only one stakeholder group = conflict.

!!!

Stakeholders and business strategy

How to deal with conflicting stakeholder needs?

The type of organization: Public limited companies give importance to shareholders.

!Aims and objectives: Profit vs. CSR

!Source and degree of power of each stakeholder group: Are the

trade unions strong?

References

http://www.communityguide.ca/sites/default/files/realtors/Money_symbol.jpg’

http://www.clker.com/cliparts/e/e/2/5/11949858391332901534government_icon_-_symbo_01.svg.hi.png

http://www.smarttrainer.co.nz/image/cache/data/Fotolia_26160800_XS-1000x800.jpg

http://www.tutor2u.net/blog/index.php/politics/comments/pressure-group-power1

!

Business and Management, Paul Hoang, 2nd edition.

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