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Stakeholders &

Stakeholders & . Business Environment. Business Perspective Stakeholders Business Environment. Business perspective . Traditional view Business as economic institution Business as socio-political institution System view Business as multipurpose institution. Traditional perspective.

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Stakeholders &

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  1. Stakeholders & Business Environment

  2. Business Perspective • Stakeholders • Business Environment

  3. Business perspective • Traditional view • Business as economic institution • Business as socio-political institution • System view • Business as multipurpose institution

  4. Traditional perspective • Business as economic institution Business as economic entity that interacts with society only through transaction in the marketplace • Business as socio-political institution Business as sociopolitical entity that interacts with society through complex interaction for increasing wealth and prosperity of society

  5. Business as an economic institution Price & Product Quality Choice of employees Business Firm Quantity of output Use of resources

  6. Business as sociopolitical institution Changes in Ideologies & Values International Environment • Increased Govt. • Intervention: • Statutory Law • Admnistrative Law Upgrading of Ethical Standard Increased Influence of external or public Interest Group Business Firm Increased Importance of Internal Stakeholder Group Improved Communication& Increased Impt of Media Changing Att.of Society toward Business

  7. System Perspective Business as a living organization that interacts with and affected by environment for economic and social motive ( multipurpose motive ) by using the limited resources Key To Survival is Capacity to adapt efficiently the changing condition posed by the environment

  8. Business as Multipurpose Institution Economic Response • Government: • Political Action • Legislative Act • Judicial Action • Regulatory Act Market Process Efficiency Market: Competition • Business: • Economic • Social • Political Stakeholder: Expectation Public Policy Process Equity Sociopolitical Response

  9. Stakeholders All groups affected by a corporation’s decision and policy All groups affected by a corporation’s decision and policy Primary Primary Secondary

  10. Primary Stakeholder Employees (union) Wholesaler Retailer Shareholder Skill Distribution Capital Business Creditor Competitor Compete Lend Money Money Material Customer Supplier

  11. Nature of Interest and Power Interest Power Shareholder - Return/Dividend - Exercising voting right - Capital Gain - Exercising right to inspect book and record Employee - Stable employment - Strike - Fair pay - Union bargaining power - Safe and comfortable - Publicity Creditor - Repayment of loan - Calling in loan - Interest -Take over loan’s collateral Supplier - Regular order - Refusing to meet order - Paid promptly - Supplying to com[etitor Distributor- Good product quality - Buying from competitor - High reliable product - Boycotting company Customer - Fair exchange - Purchasing from competitor - Safe & reliable product - Boycotting company Competitor- Be profitable -Forcing to”keep up” - Gain a larger market - Charge lower price

  12. Secondary Stakeholder Local Communities General Public Central/Local Govt. Skill, Environment Opinion Regulation Tax Business Friendly Hostile Foreign Govt. Business Support Services Image, Publicity Social Demand Media Social Activist

  13. Nature of Interest and Power Interest Power Local Com. - Employ local residents - Restricting operating licenses - Environment is protected - Lobbying government for - Local area is developed regulation of the company Social - Ensure that company - Publicizing the negative issues Activist conform to legal and - Lobbying government for ethical standard regulation of the company Media - Keep the public informed - Publicizing the negative issues on all issues - Monitor the company Business- Provide services and - Assist company in business Support information endeavor & dev. effort Government- Taxes - Regulation, licenses,& permit - Economic development - Boycotting company Foreign Gov. - Economic development - Permit to do business - Social improvement - Regulation General - Social value Protected - Support activist Public - Prosperity for society - Condemn or praise company - Risk minimized - Press government to act

  14. Business Environment • External environment • Societal ( macro ), influence the entire businesses in the same way and magnitude • Stakeholders, do not influence the business in the same way and magnitude • Internal environment

  15. Internal Environment Identify strength and weaknesses for responding to the external environment • Corporate Structure • The way of the corporation is organized in term of authority, work and information flow, communication • Corporate Culture • The collection of beliefs, expectation and value, shared by its members • Produce norms that shape the behavior of employees • Corporate Value • Explain the action taken with respect to an issue • Corporate Resources

  16. External Environment Identify opportunities and threats for survival and future success Economic • Political relationship, • processes, changes • Stability of Government • Regulation & Legal aspect • Social Value, etc • Interest rate • Unemployment • Inflation,GNP • Poverty Rate, etc Business Firm Social Politic • Demographic • Life style • Population Growth • Age Distribution • Social Value, etc • Product & Process • Innovation • Scientific Discovery • Etc Technology

  17. Business Interaction Business Firm Government Society

  18. Business Interaction Market Non Market Local Communities Central/Local Govt. Foreign Govt. Social Activist Media General Public Business Support Shareholder Employee Creditor Supplier Distributor Customer Competitor Business Firm

  19. Business Interaction Business Consumer Monopoly Oligopoly Free Market Market

  20. Free Market System Business Firm Consumers Needs & Wants Good & Services Competitive Price Voluntary Exchange Supply Demand Satisfaction Profit

  21. Consumer Bill of Right • Right to safety • Right to be informed • Right to choose • Right to be heard

  22. Business and Community Request made to business • Assistance for less advantages people • Support for air and water pollution control • Support for cultural and artistic activist • Employment and advancement of minority and women • Assistance in urban planning and development • Support of health care program • Donation

  23. Business and Government Assure good and beneficial relations between business ant its stakeholder Regulating Empowering Controlling

  24. Basic Strategies to Cope with Environmental Changes • Inactive Strategy • Do nothing • Reactive Strategy • Environment changes first ant then organization responds to it • Proactive Strategy • Organization initiates changes and than environment altered • Interactive Strategy • Organization and environment are changing simultaneously in the same direction

  25. SEKIAN TERIMA KASIH

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