Unit 1.4 Stakeholders

By the end of 1.4 you should be able to . . . Outline the interests of internal stakeholders Outline the interests of external stakeholders Discuss possible areas of mutual benefit and conflict between stakeholders’ interests

Stakeholders Who are they? Can be Internal and External Any individual or group that has a direct interest in the performance of the business. The actions of the business will affect them directly They have a “stake” or interest in the business Sometime the stake is financial Employees, shareholders, lenders, suppliers Other time it is less direct Community members, etc. Can be Internal and External

Stakeholders Internal External Grey areas can exist Individuals or groups that work within the business External Individuals or groups outside the business Grey areas can exist Employees also live in the community Employees are voters, and as such are external stakeholders Consultants are external, but when hired have an internal position Small shareholders own a stake, but don’t have the ability to influence a company

Interests of Internal Stakeholders Shareholders CEO or managing director Senior Managers Middle Managers Foremen and Supervisors Employees

Interests of External Stakeholders Government – at all levels Customers and consumers People in the local community Financiers Pressure Groups The Media NOTE – competitors are not considered stakeholders

Areas of Mutual Benefit and Conflict Each stakeholder in a business has a different focus; Differences of opinion often exist Situation – Pay raise for employees Consider the conflicting views detailed on page 57 Coordinating the interests of stakeholders is easier in a smaller business

Stakeholder Analysis Looks at comparative closeness in the decision- making process Government Employees Media Pressure Groups Owners Managers Suppliers Financiers Consumers Local Community

Example from WSJ (Wall St. Journal) Middle Column – 3rd full paragraph!!

Stakeholder Mapping Power-interest Model Level of Interest Low High Group A – minimal effort Group B – Keep informed Group C – Keep Satisfied Group D – Key Players Degree of Power Group A Group B Group C Group D Least Important to business Most important to business