BUSINESS & MANAGEMENT

1. BUSINESS & MANAGEMENT Unit 1.4 Stakeholders

2. KEY TOPICS Standard Level • Introduction • Internal stakeholders • External stakeholders • Stakeholder conflict Higher Level Extension • Resolving stakeholder conflict • Stakeholders and business strategy

3. Stakeholders • Any person/organization who has an interest in a business. • Some have authority in a business others only have influence.

4. Owners Managers Employees Government Business Customers Rivals Investors Suppliers

5. Internal Stakeholders Employees • Wages and benefits • Working conditions • Job security • Training and opportunities • Since employees do the work of the bus. and deal with customers some managers ask employees their opinions about decisions the company needs to make.

6. Shareholders • The real owners of a company. • They make the decision on how a business is managed. Shareholders objectives • Dividend payments – portion of the profits paid to share holders. • Rise in the Value of share price.

7. Managers and directors Managers control the daily running of a business Directors are elected by the company to oversee the larger business operations These groups focus on their own benefits but must also maximize profits to insure their jobs.

8. External stakeholders Suppliers • Suppliers provide businesses with goods needed for production. • They have a stake in the company because their profits are dependent on the business. • Good working relationships are very important.

9. Customer Relations ManagementCRM • CRM is very important because they are the ones who decided if a business is successful or not. • Businesses use market research (marketing department) to decided what their customers want and how to give it to them. • If a business can not keep customers happy they will lose them and ultimately profits will suffer.

10. Special Interest GroupsSIG • They serve the interests of the their members. • Examples of SIGs are: • Labor/Trade Unions • Pressure Groups • Industry Trade Groups • Local Community

11. Labor/Trade Unions • Try to improve and uphold the working conditions for their members • They work towards: • Wages in line with inflation. • Minimum wage • Better working conditions (safety)

12. Pressure groups • Individuals with a common interests will group together to put pressure on organizations to act a certain way. • Try to influence government policy by lobbing for change.

13. Actions taken by Pressure groups • Boycotting – refusing to buy a product • Lobbing – using influence with employers, legal representatives and the government • Public relations – giving out positive feedback about something • Direct action – protests, law suits against businesses

14. Industry trade groups • Organizations that specialize in promoting a specific industry. • They do not promote an individual company but the industry as a whole.

15. Local Community • Businesses will be pressured by the community that they operate. • They will demand: • Job creation • Environment consideration • Competitive prices • Participation in fund raising events

16. SIGs are more effective if they have: • Funding • Public opinion • Large numbers of members • Commitment of members

17. Whether a business listens to SIGs depends on: • How strong is the voice of the SIG • Market power of the business • Can the business afford to comply • Views of senior managers • Aims of the business

18. Competitors • Competitors are external stakeholders because they effect a business’s outlook. Some firms do not compete in certain areas. Ex. Airlines Innovation can be increased because of competitors.

19. Government • Gov’ts influence how a business operates with insurances which include: • No unfair business practices • Health and safety standards are followed • Taxes are paid • Some businesses need to pay special rates • Consumers are protected

20. Government (Cont’d) • Governments make special laws to attract businesses to their country or city. • They may also build more infrastructure to attract businesses.

21. Behavior of businesses • Different businesses need/want to listen to different stakeholders differently. Example: • Interaction with customer would differ from supplier • Interaction with government would differ from special interest groups • Interaction with employees differ from trade unions • Pressure Groups vs. Trade Unions (there are differences even within an SIG)

22. Stakeholder conflict • Because different stakeholders want different things businesses need to choose what is best for them. (Who do they want to appease right now) • Ex. Shareholders want larger dividends while employees want higher wages at the same time an environmental group wants the business to be more efficient. All of these cost money and only one can be done.

23. Homework!!!!!!!!!!! • Review questions 1 2 3 5 7 • Name 3 stakeholders for your business and how will they be affected by your business

24. Unit 1.4 Key Terms • Conflict • Directors • External stakeholders • Internal stakeholders • Managers • Pressure groups • Shareholders • Special interest group (SIG) • Stakeholders