IB Business Management 1.4 Stakeholders

Stakeholder

- An individual or group that has an interest and

an influence in a Business.

Internal Stakeholder

- Stakeholders within the business

- 3 internal stakeholders: Owners, Managers, employees

External Stakeholder

- Stakeholders outside the business

Employee: Interests

- Salary

- Job security

- Working conditions

- Professional advancements

- Job satisfaction

Employee: Influences

- Quality of work

- Efficiency

- Employee relations - 'Striking', 'Go slow'

- Customer service

- Leave = staff turnover

Managers: Interests

- Financial reward

- Performance-related-pay

- Fringe benefits

- Empowerment / Status

- Job satisfaction

- Profit maximisation

- Long-term financial health of organization

- Success in implementing their strategic & tactical objectives

Managers: Influences

- Decisions

- leave = staff turnover

- Quality of work

Shareholders: Interests

- Capital growth (share price increase)

- Dividends

- Growth of company

- Ethical?

Shareholders: Influences

- Sell shares = affects value of company

- Vote directors at AGM

- Pressure directors

Customers: Interests

- Price

- Quality

- Ethics

- Continued supply

Customers: Influences

- Move to competitors

- Repeat custom = market share

- Word of mouth

Suppliers: Interests

- Repeat custom

- Early payment = improve cashflow

- Growth of business = increase orders

Suppliers: Influences

- Quality

- Price = cost of production

- Lead time = disruption of supply chain

Competitors: Interests

- Price

- Growth strategies

- Market share

- Product development

Competitors: Influences

- Price

- Merger/takeovers

- Market share

- Promotional activities

Local Community: Interests

- Job creation

- Business opportunities

- Environmental issues (air/noise)

- Ethics

- Infrastructure

- Sponsorship/donations

Local Community: Influences

- Protests

- Slow decision making

Pressure groups: Interests

- Ethics

- Environmental protection

- Human rights

Pressure Groups: Influences

- Slow down decisions

- Bad publicity

- Share value may drop

Banks: Interests

- Repayment of loans

- Interest rates

- Profit

- Repeat business

Banks: Influence

- Take away financial loans

- Increase interest rates

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Government: Interests

- Laws = health & safety/ employment laws

- Employment

- Tax

- Growth = GDP

Government: Influences

- Interest rates (increases costs of borrowing)

- Alter tax rate

- Financial incentives/aid (subsidies & grants)

- Fines

- Exchange rate

Stakeholder Mapping

- A visual representation of your stakeholders, highlighting their power and interests in the business.

- Determine what to prioritize

How to reduce stakeholder conflict

- Worker participation

- Profit-sharing

- Arbitration

- Share-ownership schemes

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