1. Business & Management Topic 1 Stakeholders

2. Learning Objectives To know what is meant by a stakeholder Be able to differentiate between internal and external stakeholders Analyse and comment on business responsibilities to stakeholders Discuss possible areas of conflict between stakeholders HL – Evaluate ways in which conflicting stakeholder objectives might be recognised and responded to by a business

3. Stakeholders are people or groups that have an interest or “stake” in the activities of a business. Stakeholders may be able to influence the actions of a business Some stakeholders have more influence than others Stake holders can be internal or external Conflict! What does it all mean?

4. Key terms Stakeholder concept – the view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders

5. Don’t get confused Shareholder and Stakeholder are two separate things A shareholder IS a stakeholder

6. Stakeholders

7. Large Business Small Business Name some of the stakeholders you may find in a large business and a small business

8. Internal and External Stakeholders Internal Stakeholders These are people who work for the business. This means they are INSIDE the business and involved daily External Stakeholders These are people who do not work for the business, and are NOT involved in the day to day running of the business. As such they are OUTSIDE

9. Stakeholders InternalExternal

10. Stakeholders Internal Employees – employment security, wage levels, conditions of employment, participation in the business Managers – employment security, salary and benefits offered, responsibilities given Shareholders – annual dividends, share price, security of investment External Suppliers – Speed of payment, level and regularity of payment Customers – value for money, product quality, service levels Government – jobs created, taxes paid, value of output produced, impact on wider society Special interest groups – Banks and other creditors – Pressure groups – Community action groups Competitors – fairness of competitive practices

11. What do stakeholders want? Stakeholders are affected by the decisions made by a business They will try and get the business to do what they want E.G – Owners want more profit – Workers want to work in a nice environment

12. Business responsibilities to stakeholders Benefits of accepting responsibilities Customers Suppliers Employees Shareholders Special interest groups Competitors Managers

13. Business responsibilities to stakeholders Benefits of accepting responsibilities Customers Not to break laws on consumer protection and advertising Not taking advantage of vulnerable customers Giving customers assurances about quality, delivery dates, service Suppliers Effective two way communication Avoid pressure on smaller suppliers to cut prices Pay fair prices and pay invoices promptly Employees Adhere to country´s law Job training, security, pay more than minimum wage, involve staff in some decision making Shareholders Company law Annual accounts presented Actions taken to increase shareholder value over time Special interest groups Banks – payment s made as required Local community – avoid pollution

14. Competitors Compete fairly and within the law Managers Job security Competitive salaries and other benefits Opportunities for responsibility and career advancement Fill in the second part of the table, what benefits to a business are there of accepting these responsibilities?

15. Task 1.In pairs, create a map of stakeholders for The Churchill College 2.Who do you think has the most influence? – Why? 3.Who do you think has the least influence? – Why? 4.Which stakeholders may argue? Why?

16. Stakeholder Conflicts Business decisions and activities can have both positive and negative effects on shareholders and stakeholders Unfortunately the different requirements of stakeholders can cause problems This is because there will be arguments about what the business should do Question If owners want more profits they may increase prices, customers however, will want lower prices What should the business do?

17. BUSINESS DECISION \ ACTIVITY IMPACT ON: EmployeesLocal CommunityCustomers Expansion of the business Takeover of a competing firm New IT introduced into production methods

18. Stakeholder Influence When conflict occurs it is likely that the stakeholder with the most influence will get what they want This will be different for every business The customers of McDonalds have less influence than the customers of the school cafeteria Can you explain why?