1. Business & Management
Topic 1
Stakeholders

2. Learning Objectives
HL – Evaluate ways in which conflicting stakeholder objectives might be recognised and responded to by a business

3. Stakeholder Conflict
Business decisions and activities can have both positive and negative effects on stakeholders
Rare for all stakeholders to be either positively or negatively affected
It is also possible for any one stakeholder group to experience both negative and positive effects from the same business decision

4. Stakeholder Conflict
Unfortunately the different requirements of stakeholders can cause problems

5. Evaluating Stakeholder Conflict
One way of reducing conflict is to compromise
A business aiming to reduce costs may close a factory in stages in order to allow workers time to find a new job
Senior management need to establish their priorities
They need to decide who the most important stakeholders are in each case as these will differ

6. Methods of conflict resolution
Arbitration – To resolve industrial disputes between workers and managers
Worker Participation – To improve communication, decision-making and reduce potential conflicts between workers and managers. EG Employee directors
Profit Sharing Schemes – To reduce conflict between workers and shareholders over the allocation of profits and to share the benefits of company success
Share Ownership Schemes – to reduce conflict between workers, managers and shareholders

7. Methods of conflict resolution
Task
Consider the advantages and disadvantages of each method
Do you think this will always work? – Why?