Stakeholder of LSOs

Stakeholders Definition Any individual or group that interacts with and has a vested interest in an organisation. KNOW THIS DEFINITION!!! Stakeholders is a very commonly assessed component which is sometimes assessed across Units and Areas of Study. Note: The study design does not include a list of stakeholders. The list provided is not exhaustive but does include the main stakeholders.

Types of Stakeholders ShareholdersManagement Unions Employees CustomersSuppliers CommunitiesCustomersGovernment

Shareholders Have a large stake in organisation as they are owners. Shareholders receive profit (or suffer losses) generated by a business. These profits that are distributed to shareholders are known as dividends. They also make a capital gain if the organisation performs well and the share price increases. In general, most investors are most interested in maximising the returns on that investment.

Management Managers are employed to direct the company on behalf of the owners. Managers are paid a salary and most receive a bonus for high performance. It is their job to maximise productivity by utilising the resources of the organisation.

Employees Employees have a stake in organisation performance. Job security and future opportunity often depend on how the organisations performs as a whole. Employees are vital to an organisation as they manufacture or produce the product which the organisation sells. Employees generally want good working conditions including pay, leave, work hours etc.

Unions Unions are organisations that are set up to represent employees in Australia. They attempt to negotiate better work conditions on behalf of members and fight to maintain the rights of workers. Unions rely on employees joining and paying a membership fee.

Customers Customers use the goods and services produced by the organisation. Customers expect to receive value for money in goods and services. This may be related to price and/or quality. Business image is often important for customers especially in relation to Ethics and Socially Responsible Management.

Suppliers Suppliers provide raw materials, component parts and finished goods to organisations for use in the production process or for on selling. As such organisations are the customers of suppliers. Organisations and suppliers need to build strong relations to benefit both organisations. Suppliers are expected to deliver supplies on time and of a good quality. Many organisation also expect suppliers to act in a socially responsible manner.

Communities Communities in general expect LSOs to show concern for the environment. Communities may be local, national or international. Concerns may be in the disposal of waste in giving back to the community in which they operate.

Conflicts between stakeholders Stakeholders often have competing demands on organisations. Whilst some expectations are compatible, others aren’t. Example: Employees and unions want reasonable pay and a safe workplace. Shareholders want to maximise returns on investment. Meeting the first may be costly and therefore impact on the second. There are many conflicts which may arise.

Ethics and Socially Responsible Management What is important is that LSOs operate ethically and socially responsible with their stakeholders. Ethics are the moral standards and principles that guide people’s decisions and actions. SRM is showing concern for the condition of society at large. Many organisation now refer to the ‘triple bottom line’ which refers to their profit, social and environmental performance.