1.5.2 The Role of Stakeholder Groups

Learning Outcomes To understand the main internal and external stakeholder groups To understand the main objectives of each group To be able to evaluate how these objectives may cause conflict between stakeholder groups

Stakeholders People with an interest in the success of a business

Who are the Stakeholders of BSM? Who are internal? Who are external?

Stakeholders in general – suggested answers Internal External Employees Managers Owners Customers Suppliers Shareholders Bank (and other lenders) Local residents The government Environmental pressure groups etc.

External Stakeholders Internal Stakeholders Suppliers Customers Competitors Special Interest Groups Local Community Internal Stakeholders Employees Shareholders Managers Government Lenders Media

Stakeholder objectives Stakeholders Stakeholder objectives

Stakeholder objectives examples – group discussion For the following stakeholder groups discuss their objectives (hopes) for a business: Owners/shareholders Managers Employees Suppliers Pressure groups Local residents value for money good service quality e.g. Customers

Stakeholder objectives objectives might include: Customers: value for money, good service, quality Owners/shareholders: satisficing/maximising return on investment Managers: status, performance bonuses Employees: high wages, conditions of work Suppliers: to sell a lot at a high price, repeat orders, customer loyalty Pressure groups: to force a reduction of environmental impact Local residents: Employment, no pollution, putting something into the local community

Stakeholders Stakeholder conflict

Reflect Looking back at the different stakeholder objectives: Will all stakeholders be happy? Could there be conflict? Between Whom? Why? How can it be resolved/minimised?

Stakeholder Task - Group Fill in the sheet about the 8 different stakeholder groups Who are you? – Definition What do you want? (Top 3 wants) What will happen if your needs are not met?

Meeting Stakeholder needs Look at your filled in sheets Which stakeholder groups are likely to have interests that ‘conflict’ Is it possible to keep all stakeholders happy all of the time? Which stakeholder group is the most important?

Stakeholder conflict Owner v customer: Profit v service e.g. conflict over opening hours Shareholder v worker: Profits v high wages Owner v management: “Divorce between ownership (profits) and control” i.e. The owners have little power Employer v employee Employees see their hard work reflected in higher profits for the employer Employers look for greater efficiency – more output for lower costs

Video Watch the video ‘Stakeholder conflicts’

Apply your understanding to: Stakeholders Final task – Apply your understanding to: The Dyson debate – to move or not to move Shell – Managing stakeholders case study