U09061 MANAGING BUSINESS RELATIONSHIPS Karas/MBR 0910 JUDI KARAŚ Unit Co-ordinator TEACHING TEAM John Baldry Hazel Beadle Chris Chapleo Ray French David Hall Jennifer Johnston Karen McCormick Vijay Pereira Vesselin Blagoev

WEEK 1 : RELATIONSHIPS AND STAKEHOLDERS Karas/MBR 0910 Unit Overview – Learning, Teaching and Assessment Why study MBR? Which Business Relationships? A Stakeholder Perspective The ‘MBR Diamond’

Unit Overview Karas/MBR Credits = 200 hours’ Student Effort Classes (22 hours) + Exam (2 hours) = 176 HOURS’ INDEPENDENT STUDY comprising SSeminars RReading RResearch, preparation, rehearsal and delivery of assessed group presentation and writing and submission of group assignment RRevision Assessment – See Unit Handbook Group Case Analysis – Presentation and Written Report = 40% of total marks Two Hour Exam = 60% of total marks

Why Study Business Relationships? Karas/MBR 0910 “ Mutually beneficial relationships including employees, investors and other stakeholders, result in confidence and trust that can carry an organization through the inevitable hard times.” Source: The Universal Manager-report

Which ‘Business Relationships’? Karas/MBR 0910 Intra-organisational (internal) relationships  Person to person  Leadership, management and power Inter-organisational (external) relationships  Person to business  Morgan Spurlock & McDonalds  Business to person  Gerald Ratner’s decanter and earrings  Business to business  Nike’s 100% outsourcing strategy  Strategic alliances

Relationships : A Stakeholders’ Perspective Karas/MBR 0910 Definition “Any individual or group which has an interest in and/or is affected by the goals, operations or activities of the organisation or the behaviour of its members.” Mullins (2005) p.1063

Classifying Stakeholders Karas/MBR 0910 Internal Stakeholders Owners Decision-makers Unions and employees The Organization Marketplace Stakeholders Customers Competitors Suppliers External Stakeholders Government Political or Activist groups Financial community Trade associations Greenley 1989 p.153

Defining Stakeholders Karas/MBR 0910 Finlay 2000, pp Primary/Active: “always want more” providers of capital customers employees suppliers Secondary/Passive: “want acceptable performance” government pressure groups including local communities

Stakeholder Power Stakeholder Power (Johnson and Scholes 2003 – see Handbook) Karas/MBR 0910 Sources of power (internal stakeholders)  formal hierarchical power  informal power  control of strategic resources including skills Sources of power (external stakeholders)  control of strategic resources  involvement with organisation  links : internal and external (e.g. media)

Stakeholder Mapping (Mendelow 1991 cited in Johnson and Scholes 1993) Karas/MBR 0910 HighLow A Few problems B Unpredictable but manageable High C Powerful but predictable D Greatest danger or opportunities LowHigh Low A Minimal effort B Keep Informed High C Keep satisfied D Key players POWER/DYNAMISM MATRIX POWER/INTEREST MATRIX Power Predictability Level of Interest see Handbook pp for required reading

Stakeholder Mapping (Mitchell et al 1997) Karas/MBR 0910 Three Alternative Dimensions Power Legitimacy : legal, or standing in society Urgency : requires immediate attention

Stakeholders in Practice Karas/MBR 0910 “Vodafone’s success flows from our commitment to sound business conduct and the way we interact with our stakeholders-shareholders, employees, customers, business partners and suppliers, government and regulators, communities and society and the environment.” Source: Vodafone.com Our Business Principles

but … open to interpretation! Karas/MBR 0910 Michael O’Leary on Ryanair’s Stakeholders  European Commission …”morons”  BAA …”overcharging rapists”  UK air traffic control …”poxy”  Travel agents …”f***ers who should be taken out and shot”

The ‘MBR DIAMOND’ (© Karas 2009) ‘the total interconnectedness of all things” Karas/MBR 0910 Trust Levels Development Ethics Individual Organisational Transaction Costing Cost benefit “Make or buy” External Stakeholders Marketplace Stakeholders Promiscuity Polygamy Loyalty Internal Stakeholders Management Leadership Power