L05

What is a stakeholder?

Any group or individual who can affect or is affected by the activities of a business

what does an employee want from the business

- Being paid fairly
- Good working conditions
- Job Security
- Long Career

Why does the business need to keep employees happy

- As they keep the business running

How much power do employees have to influence business behaviour? What can they do to alter business behaviour?

High power - They can go on strike if thry are not happy

what does an Owner/Founder want from the business

- Skilled, Loyal and Hardworking employees
-Ensure the business remains competitive

Why does the business need to keep Owners/Founder happy

- They have the power to maks decisions to make themselves happy.

How much power do Owner/Founder have to influence business behaviour? What can they do to alter business behaviour?

High power - Ultimate descion maker

What does an Customer want from the business

- Be treated fairly
- Good value for money
-Quality products

Why does the business need to keep Customers happy

- Without customers the business will not survive

How much power do Customers have to influence business behaviour? What can they do to alter business behaviour?

Low Power - As an individual
High Power - As a group

what does an Supplier want from the business

- Fair Contact
-Paid within agreed time scale

Why does the business need to keep Suppliers happy

- Supply products and services required

How much power do Suppliers have to influence business behaviour? What can they do to alter business behaviour?

- Depends if there are alternatives

what does an Financial business want from the business

- Advising the business financially
- Fund or retain the financial aspects of the business

Why does the business need to keep Financial businesses happy

- Investment advice
- Financial support

How much power do Finacial business have to influence business behaviour? What can they do to alter business behaviour?

Depends if there are alternatives - Has power not to give you money but you could go to a different bank

what does a Local community want from the business

- Respect local community
- Purchase the products and services
- Limit air pollution
-Traffic noise
- Reduce Pollution
- Inform the local community of any major charges that may impact on the local residents

Why does the business need to keep Local community happy

- Need local communities on their side

How much power do Local communities have to influence business behaviour? What can they do to alter business behaviour?

Low Power - But can create bad publicity

what do Local and central governments want from the business

- Ensure business abides by the law
- Encourage and support economics

Why does the business need to keep Local and central governments happy?

- Need to abide by the laws, government can intervene if unhappy.

How much power do Local and Central governments have to influence business behaviour? What can they do to alter business behaviour?

- Very powerful as they create and enforce laws.

what do Trade Unions want from the business

- Support the employees to ensure fair working conditions

Why does the business need to keep Trade unions happy

- Need to keep staff representative happy to prevent industrial action.

How much power do Trade Unions have to influence business behaviour? What can they do to alter business behaviour?

High Power - As a group

what do Shareholders want from the business

- Support the business
- Investing funds in exchange for shares

Why does the business need to keep Shareholders happy

- Directors need to keep shareholders happy as they can dismiss directors

How much power do Shareholders have to influence business behaviour? What can they do to alter business behaviour?

Very Powerful - As a group. The owners of the business can sell the business on or sack the directors.

what do Pressure groups want from the business ?

- Monitor business activities and processes
- Influence alternative business decision

Why does the business need to keep Pressure groups happy

- Need them on side to avoid bad publicity, which could negatively affect sales

How much power do Pressure groups have to influence business behaviour? What can they do to alter business behaviour?

Low power - but they can create bad publicity and complain to government, but little influence to change outcome.

List of internal stakeholders

- Owners, employees, and trade unions

List of external Stakeholders

- Shareholders, customers, suppliers, investors, lenders, local communities, pressure groups and central and local governments

examples of conflicts between stakeholders

- Manager Vs Employees, Employees want high wages, increasing cost. Managers want to increase efficiency (lower cost) to get their bonus.

-Customers Vs Shareholders. Customers want higher quality/lower prices/more environmentally friendly all which reduce profit. Shareholders want higher profits so thry get higher dividends.

why can conflicts between stakeholders arise

When stakeholder want different things

What is conflict resolution used for.

the methods a business may implement to resolve any major issues that affect the way in which business is preformed for example negotiation

If a business increase its shares by 10% who will be happy and why

Owner/Founder - More Money
Employees - High Wages
Shareholders- Better Dividends
Government- Higher Taxes

If a business increase its shares by 10% who will be unhappy and why

Customers - More expensive

How could a business manage the conflict between stakeholder groups? What should they do?

Listen to points of view from both sides
Negotiations

What is stakeholder analysis?

Involves considering each stakeholder's needs.

Things stakeholders need to bear in mind

- Key interests issue
- What communication approach they prefer
- Current status ( how they feel)
- Desired support the businessneeds from the stakeholder
- Actions desire and messages needed
- Actions and communication

What is the point of understanding the point of view of stakeholders

By understanding the points of view of a stakeholder, and considering these when making decisions, potential conflicts will be reduced.

Benefits of considering stakeholder needs

- Gain a better understanding of each stakeholder's objectives
- Listening to stakeholders and communicating with them improves trust and each side will have a better understanding of one another's point of view reducing the need for conflict resolution.
- Identify which stakeholders holders hold most power and intrest and therefore exert the most influence on the business.
- Talking to stakeholder may help the business, e.g. contacts, resources, ideas

Drawbacks of considering stakeholder needs

- Time consuming
- If issues stakeholders raised are not considered, and advice goven not implemented, stakeholders may become annoyed