STAKEHOLDERS - people who can be affected by and therefore have interest or stake in the business
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Internal Stakeholders
- members of the organization
Interests
- Employees
- job security
- wage levels
- work environment
- Managers
- job security
- salary and benefits
- Shareholders
- annual dividends
- share price
- security of investment
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External Stakeholders
- do not form part of the business but have a direct interest or involvement in the organization
Interests
- Suppliers
- regular contracts
- competitive prices
- Customers
- value of money
- product quality
- quality of service
- Pressure Groups
- enforce demands on organizations to act in a particular way
- create jobs
- don’t harm environment
- ethical with employees
- Government
- job creation
- tax payments
- impact of business on society & economy
- Competitors
- fairness of prices
- strategic plan of business
- remain competitive
- bench work performance
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Stakeholder Conflict
- It isn’t possible to satisfy all stakeholders at the same time
- Conflicts always arise between different stakeholder interests
- Shareholders want more profit by cutting employee benefits
- Suppliers expect full payment, but business wants discount in exchange
- Shareholders and employees argue that top managers are overpaid, but managers believe their job involves risky decision-making and the salaries are justified
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Mutual Benefits of Stakeholder’s Interests
- There are mutual benefits of simultaneously satisfying different stakeholders.
- Addressing employee and manager needs leads to highly motivated staff, boosting productivity, and reducing absenteeism.
- This can improve corporate image, market share, and profits.
- Stakeholders are pleased and the greater output satisfies the government and pressure groups.
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