The corporate governance framework provides the formal requirements and boundaries within which s... more The corporate governance framework provides the formal requirements and boundaries within which strategy is being developed. It relates to the relationships and responsibilities within the governance chain shown earlier in Exhibit 4.2. But alongside this it is also important to understand the expectations of other groups who are not in the corporate governance chainsuch as suppliers, customers or local communities. For all of these groups (both inside and outside the governance chain) it is important to understand their expectations in detail, how these might differ from each other and the extent to which they are likely to seek influence over an organisation's purposes and strategies. Collectively these groups are called organisational stakeholders and exist both outside and inside an organisation as this section will explain. Stakeholders are those individuals or groups who depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends. Important external stakeholders would usually include financial institutions, customers, suppliers, shareholders and unions. Inside an organisation few individuals have sufficient power to determine unilaterally the strategy of the organisation. Influence is likely to occur only because individuals share expectations with others by being a part of a stakeholder group, which may be departments, geographical locations or different levels in the hierarchy. Individuals may belong to more than one stakeholder group and stakeholder groups will 'line up' differently depending on the issue or strategy in hand. External stakeholders can be usefully divided into three types in terms of the nature of their relationship with the organisation and, therefore, how they might affect the success or failure of a particular strategy:
The corporate governance framework provides the formal requirements and boundaries within which s... more The corporate governance framework provides the formal requirements and boundaries within which strategy is being developed. It relates to the relationships and responsibilities within the governance chain shown earlier in Exhibit 4.2. But alongside this it is also important to understand the expectations of other groups who are not in the corporate governance chainsuch as suppliers, customers or local communities. For all of these groups (both inside and outside the governance chain) it is important to understand their expectations in detail, how these might differ from each other and the extent to which they are likely to seek influence over an organisation's purposes and strategies. Collectively these groups are called organisational stakeholders and exist both outside and inside an organisation as this section will explain. Stakeholders are those individuals or groups who depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends. Important external stakeholders would usually include financial institutions, customers, suppliers, shareholders and unions. Inside an organisation few individuals have sufficient power to determine unilaterally the strategy of the organisation. Influence is likely to occur only because individuals share expectations with others by being a part of a stakeholder group, which may be departments, geographical locations or different levels in the hierarchy. Individuals may belong to more than one stakeholder group and stakeholder groups will 'line up' differently depending on the issue or strategy in hand. External stakeholders can be usefully divided into three types in terms of the nature of their relationship with the organisation and, therefore, how they might affect the success or failure of a particular strategy:
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