A look at all the stakeholders in a business, their objectives, how conflict may arise and types of conflict between different groups i.e. between customers and shareholders.
A look at strategic evaluation and its advatnages and disadvantages.
A stakeholder is a person or group who has a direct influence on the business entity.
Stakeholder Groups:
Owners -> dividend, profit, growth, survival and environment.
Managers -> salary, job satisfaction, bonus, success and growth.
Employees -> good salary, job security + job satisfaction, promotion opportunities.
Suppliers -> payment + business in the LT.
Customers -> Constant supply, value for money and safe goods.
Creditors -> Repayment, profit and interest.
Society -> Clean environment, jobs + local impacts -community investment.
Government -> Operating legally, tax receipts, job opportunities, and apprenticeships.
Stakeholder Objectives:
Each group - own objectives and therefore adopt a different perspective regarding activities of the
business.
This is likely to influence the business in different ways.
Depending on where the balance of power lies - make the business more powerful + manipulate
stakeholder behaviour - consistent with the achievement of business objectives.
However, situations in which power of stakeholders would appear to be more influential.
Influence of Stakeholder Groups:
Owners:
o Seen as most powerful, ultimate responsibility for decisions taken, however this is
dependent of the type of business.
o Sole trader and partnership - most powerful.
o Limited Companies - Responsibility for strategic + operational decision making - delegated
to BOD.
o Shareholders would be consulted and opportunity to provide opinions - AGM.
o The major shareholders may also be on the BOD.
Managers:
o Members of the management team - responsible for making key decisions on a day-to-day
basis.
o In addition to long term strategic context.
o In profit-orientated businesses, managers more determined to achieve success since their
terms/conditions of employment linked to business performance.
Employees:
o Can exercise power - involved heavily daily operations and interfacing with customers.
o The output of an employee's workload contributes to the employer's objectives.
Suppliers:
o Reliant upon suppliers to participate fully in all aspects of the supply chain to contribute
effectively to the achievement of business objectives.
Customers:
o Final link of the supply chain.
o Ultimate decision whether or not to acquire the product/service, from the vendor.
o Powerful external stakeholder.
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