3.2.3 Understanding the role and importance of stakeholders

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    3.2.3 Understanding the role and importance of stakeholders

    The need to consider stakeholder needs when making decisions

    Stakeholder = anyone with an interest in the business and its operations

     

    Stakeholder groups:

    • Customers
    • Employees
    • Investors/banks
    • Suppliers/distributors
    • Shareholders
    • Owners/managers
    • Competitors
    • The government
    • Local communities
    • Environmental pressure groupies
    • The media

     

    Stakeholder mapping:

    Power = their part in decision making or how much they would negatively affect you

    Purpose = helps you when making decisions and prioritise stakeholders where there will be potential conflict

     

    Stakeholder needs and the possible overlap and conflict of these needs

    Stakeholders needs:

    • Employees – happy environment, high wage, keeping their job, good & safe working conditions
    • Suppliers – regular orders, contractual agreement, security
    • Customers – low price, high quality, good customer service, value for money
    • Competitors – price, customers, (affected by other decisions)
    • Government – wants them to do well, collect taxes (and raise them)
    • Local communities – local environment, friendly firms
    • Owners and managers – dividends, potential benefits, expansions, happy employees, profit
    • Investors and banks – repayments on time and with full interest
    • Shareholders – regular dividends, how much profit the firm makes

     

    Potential conflicts between stakeholders:

    Influences on the relationship with stakeholders

    Factors that affect stakeholder relationships:

    • Quality of products made
    • Information available
    • How easy it is to communicate with them
    • Their status
    • Customer service
    • Influence or power
    • Workplace environment for employees
    • How much money they have invested into the business
    • Views on the environment
    • Revenue produced
    • Prices of products being sold
    • Decisions made by the firm

     

    How to manage the relationship with different stakeholders

    How to communicate with stakeholders:

    • General meetings
    • Letters
    • Email and social networking
    • Posters of advertising
    • Public forums
    • Media release

     

     

     

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