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    1.4 Stakeholders: On Completion of This Chapter, You Should Be Able To: Analyse and Apply

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    Kressida Banh
    This document discusses stakeholders and their interests. It begins by defining stakeholders as parties that can affect or be affected by a business. It then distinguishes between internal stakeholders, such as employees and managers, and external stakeholders, such as customers and suppliers. For each stakeholder group, their interests in the business are described as well as the potential benefits to the business of meeting their needs. For example, employees are interested in fair pay and safe working conditions, while meeting employee needs benefits businesses through higher productivity. The document also notes potential conflicts that can arise between stakeholders due to differing priorities.

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    1.4 Stakeholders: On Completion of This Chapter, You Should Be Able To: Analyse and Apply

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    Kressida Banh
    34 views12 pages
    This document discusses stakeholders and their interests. It begins by defining stakeholders as parties that can affect or be affected by a business. It then distinguishes between internal stakeholders, such as employees and managers, and external stakeholders, such as customers and suppliers. For each stakeholder group, their interests in the business are described as well as the potential benefits to the business of meeting their needs. For example, employees are interested in fair pay and safe working conditions, while meeting employee needs benefits businesses through higher productivity. The document also notes potential conflicts that can arise between stakeholders due to differing priorities.

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    This document discusses stakeholders and their interests. It begins by defining stakeholders as parties that can affect or be affected by a business. It then distinguishes between internal stakeholders, such as employees and managers, and external stakeholders, such as customers and suppliers. For each stakeholder group, their interests in the business are described as well as the potential benefits to the business of meeting their needs. For example, employees are interested in fair pay and safe working conditions, while meeting employee needs benefits businesses through higher productivity. The document also notes potential conflicts that can arise between stakeholders due to differing priorities.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    34 views12 pages

    1.4 Stakeholders: On Completion of This Chapter, You Should Be Able To: Analyse and Apply

    Uploaded by

    Kressida Banh
    This document discusses stakeholders and their interests. It begins by defining stakeholders as parties that can affect or be affected by a business. It then distinguishes between internal stakeholders, such as employees and managers, and external stakeholders, such as customers and suppliers. For each stakeholder group, their interests in the business are described as well as the potential benefits to the business of meeting their needs. For example, employees are interested in fair pay and safe working conditions, while meeting employee needs benefits businesses through higher productivity. The document also notes potential conflicts that can arise between stakeholders due to differing priorities.

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    © All Rights Reserved
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    Download as doc, pdf, or txt
    of 12

    1.

    4 Stakeholders
    On completion of this chapter, you should be able to:

    Analyse and apply:

     The interests of internal stakeholders (AO2)


     The interests of external stakeholders (AO2)
     Conflicts between stakeholders. (AO2)

    Tasks

     Define ‘stakeholders’
    A stakeholder is a party that has an interest in a company and can
    either affect or be affected by the business. The primary stakeholders
    in a typical corporation are its investors, employees, customers, and
    suppliers.

    All stakeholders are directly affected by the performance of the business and, different
    stakeholders have different degree of influence on the organization.

     Distinguish between internal and external stakeholders and give


    examples of both.

    Internal stakeholders are people whose interest in a company comes


    through a direct relationship, such as employment, ownership, or
    investment.

    External stakeholders are those who do not directly work with a


    company but are affected somehow by the actions and outcomes of
    the business. Suppliers, creditors, and public groups are all considered
    external stakeholders.
    1.4.1 Possible stakeholder objectives (interests)

    For each of the following internal stakeholders, describe their interests in the
    business (what do they expect) and the benefits to the business of meeting
    the needs of the stakeholders.
     Employees
    o The workers of the company

    Their interests Benefits to the business


    Fair pay and safe (physically, High productivity resulting from
    mentally, and socially) working motivated workers.
    environment
    Developing and advancing in More focus and effort are put into
    their career the work, allowing the
    organization to progress. The
    quality of work conducted will
    improve.
    Fair holidays Employees are then in well-
    condition and healthy to work
    more
    Fair working hours Non-overworked employees
    allow the workers to be in better
    condition to create higher quality
    of work
    Working for an organization with Will work better as a staff to
    a good image obtain the image of the company,
    thus contributing to the company
    better.
    Staff welfare, health insurance Healthy workers allow happier
    workers in general, will allow
    workers to be more long lasting to
    the company
    Taking part in the decision- Giving workers the respect of
    making process understanding what they are
    taking part in allows a smaller
    possibility for workers to go
    against the company and legal
    issues.

    Happier workers will have happier customers. Which allows more


    purchases and pride for the business.

    Former James Finlay tea workers move to Scottish court over injuries - The Standard
    (standardmedia.co.ke)

    http://www.the-star.co.ke/news/we-will-not-return-work-pg-security-guards-say-over-
    harassment

    http://www.bbc.com/news/business-38756194

    https://abcnews.go.com/Business/starbucks-raising-wages-baristas/story?
    id=74299264&cid=clicksource_4380645_2_heads_hero_live_headlines_hed

    http://www.wsj.com/articles/lufthansa-pilots-extend-strike-into-second-week-
    1480345052

    Union calls deal to avert strike 'a Hollywood ending' as negotiations continue for
    workers in other parts of country

    https://www.cnn.com/2021/10/16/entertainment/union-strike-deal-hollywood-
    iatse/index.html

     Managers and directors


    Their interests Benefits to the business
    Lead and persuade others - The company will grow
    Make decisions - Increase work productivity
    Promotions & higher status and efficiency
    The workers to have efficiency - Brand would have a good
    Want the business to grow and image or reputation, hence,
    improvements on business’ increasing the brand
    performance (helping the business recognition amongst the
    to achieve long term goals) public to attract more
    Job security customers.
    Bonuses

     Shareholders (stockholders)

    Define shareholders

    Their interests Benefits to the business

    https://www.bbc.com/news/business-46424830

    1.4.2 External stakeholders

    For each of the following external stakeholders, describe their interests in


    the business (what do they expect) and the benefits to the business of
    meeting the needs of the stakeholders.
     Customers

    Their interests Benefits to the business


    Quality products, long-lasting - Free marketing by the
    products customers to introduce
    Customer service more customers
    Provide goods that satisfy their - Customer loyalty -> long
    needs, that meet the customer term sustainability for the
    needs (customization) -> business service
    needs to do marketing research to - Good brand image, better
    satisfy their needs reputation for the brand
    Appreciation and recognition to
    the loyalty they have to the
    business (rewards discounts etc)
    Convivence to buy

     Suppliers

    Their interests Benefits to the business


    Regulation of orders to sustain Long term sustainability for the
    self business
    Fair prices The partnership allows stability
    Fair treatment there is no disruption of lack of
    supply, that may cause destruction
    of product creation lines
    Payments are on time and on a Priority and supplier loyalty
    regular basis

     Pressure groups
     - churches, green

    Their interests Benefits to the business


    Well being of the workers,
    working conditions
    Working environment
    Working practices to be ethical
    and sustainable

    al
     b.
    Their interests Benefits to the business
    improve the quality of life of the
    community
    Job opportunities,

    https://www.theguardian.com/world/2020/jun/18/papua-new-guinea-chiefs-call-for-halt-
    to-plan-for-countrys-largest-ever-mine?CMP=Share_AndroidApp_Outlook

     Competititors

    The interests of competitors Benefits to the business from


    competition
    Fair competition
    They want to learn from the
    competitors’ success
    Strategy plans from other people
    to ensure the quality of their own
    business

     Government

    Their interests Benefits to the business


    Businesses to create jobs for the
    community
    provide our society
    Follow the laws
    Respect the national values
    A business friendly environment,
    a justice system, and an
    environment that is free of
    corruption

    http://www.shanghaidaily.com/national/Beijings-polluters-cough-up-US16m/
    shdaily.shtml

    1.4.3 Stakeholder conflicts

    Stakeholder conflict exists due to the varying needs and priorities of the
    various stakeholder groups of a business. Such conflicting interests mean
    that it is not possible for a business to meet all of its stakeholder objectives
    simultaneously.

    Conflicts arise because a business cannot simultaneously satisfy the needs of


    all its stakeholders. A business decision or actions will affect different
    stakeholders differently. An action may create benefits to some
    stakeholders while harming the interest of others.
    S

    takeholder conict refers to


    dierences in the varyin needs and priorities of
    the various stakeholder groups of

     Identify potential sources of conflicts arising from varying interests of


    different stakeholder groups.

    Another source of potential conflict is that some stakeholders have more


    than one role or set of interest in an organization. For example, managers are
    employees but may also be shareholders or even suppliers of the same
    organization. This might cause a conflict of interest.

     Identify potential sources of conflicts arising from a stakeholder


    holding different role or set of interests in an organization.
    1.4.4 Conflict resolution
    Stakeholders and the concepts

     Why change could bring conflict among stakeholders.


     To what extent can conflicts among stakeholders be resolved by the adoption of a
    sustainable practices?
     Is it unethical for a business to give one group of stakeholders priority over the
    interests of other stakeholder groups?
    BMT: Lewis Force Field Analysis [FFA] HL only

    ToK
    Is it unethical if a business chooses to ignore the demands (or needs) of one
    particular stakeholder groups?
    Extension material that can be used in EE

    Stakeholder mapping

    This is a model that assesses the relative interest of stakeholders and their
    relative power (or influence) on a business, as shown below.
    How do managers use stakeholder mapping to provide for the interests of
    different stakeholder groups?

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