13/12/2020

1.4 STAKEHOLDERS*

*(not steak holders!)

Lesson Objectives
1 – Who are stakeholders and
Stakeholders
what are their objectives

2 – Why organisations care Keywords

Stakeholders
about stakeholders Social responsibility
Market conditions
Communication
Stakeholder
3 – How can we manage engagement
Consultation
stakeholders

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Stakeholders
Groups or individuals who
have an interest in a
business

Who are stakeholders?

Creditors Directors
Employees
Suppliers
The Business

Communities
Customers

Government Shareholders

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Primary Vs Secondary
• Customers
Primary • Employees
stakeholders • Suppliers
Directly deal with the business • Creditors
• Shareholders

• General Public
Secondary • Local community
stakeholders • Government
No financial or functional relationship • The media
to the business
• Activist groups

Internal Vs Extrenal
• Employees
Internal
stakeholders • Managers
People who are considered inside the
• Shareholders
organisation
• Board of directors

• Customers
External • Government
stakeholders • Suppliers
People who are outside the business
• Creditors

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What do they want?

Stakeholder Likely objective
•Returns on investment.
Shareholders
•High Dividend payments.
Customers
Employees
Government
Suppliers
Creditors
Local Community
Pressure Groups
Media
Financial Institutions

Conflict
Stakeholders
often don’t
agree.
Businesses have to
manage the wants of
their stakeholders and
will often have to
prioritise the needs of
one group over that of
another.

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Why do we care?
Some stakeholders can clearly have a big impact
on the business. Customers not being happy can
result in a loss of sales. Shareholders not being
happy can result in a falling share price and job
losses.

For other stakeholders their impact is less clear.

How might the government impact a business?
The local community? A pressure group?

Social responsibility
When once businesses cared only about their
shareholders many businesses are now focusing
on the wider community. This is known as ‘Social
Responsibility’

The idea is that firms should behave not just

legally but like good citizens.

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Is it all for show?

Influences in dealing with

stakeholders
Internal factors External factors

Market
Objectives conditions
Leadership
style Stakeholder
power

Size of Gov
business policies

Relationship with stakeholders

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Stakeholder Importance
Most
important • Local residents
• Other businesses
• Local council
• Government
• Suppliers
• Outsourced services
• Creditors
• Tax Authority
• Shareholders
• Institutional investors
• Employees
• Trade unions
• Managers
• Customers
• Wholesalers
• Pressure groups
Least
important

Stakeholder mapping
Level of interest
Low High

Minimal Keep
Low

effort informed
Degree of Power

Keep Key
High

satisfied players

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Stakeholder mapping
Minimal Keep
effort informed

Keep Key
satisfied players

How can we use a stakeholder map to identify key

stakeholders?
Why might this be a useful process?
Which group is the most important to the business?
Which group is the least important?

Presentation!
• Find a news article which discusses a
business with a conflict of interests
between stakeholder groups
• Make a short presentation which includes:
– An explanation of the situation
– Which stakeholders have been affected?
How?
– What do the different groups want?
– Suggestion of a possible solution