Business - Stakeholder Conflicts

• Stakeholders


  Anyone that have an interest in the business, can be internal (owners, employees, shareholders) or external (customers, suppliers, local community)
• Stakeholders can have conflicts with one another

  As a result of businesses making decisions
• Stakeholder conflicts


  • Board of Directors increasing dividends (shareholders happy, employees unhappy)
  • Business introducing automation (shareholders/customers happy, employees unhappy)
  • Business increasing prices (shareholders happy, customers unhappy)
  • Business switching to ethical suppliers (ethically conscious customers happy, price conscious customers unhappy)
• Awareness of stakeholder conflicts is important, can be used to power down evaluation and conclusions in longer questions
• • Role of the suppliers:  To provide the business with goods or services that they might need
  • Objectives of the suppliers: They want to charge high prices to make a profit, they want customer loyalty with repeat orders, they also want payment on time, they may also want larger orders
• Role of the customers: To buy goods or services from the business

  Objectives of the customers: To get a good choice of goods or services, to get value for money, to get quality products at low prices, to have the opportunity to buy innovative products
• • Role of the UK government: To provide low employment, low inflation and economic growth for the country
  • Objectives of the UK government: They will want the business to pay tax on their profits, they will also want the business to provide employment
• • Role of the local community: For those who live near a business who may be affected by its operations
  • Objectives of the local community: They want the business to provide jobs, they want the business to operate in an ethical way, they may also want them to buy from local suppliers and to not pollute the local atmosphere
• • If the business has some production processes that mean they need to release gas
  • This may be polluting the air
  • This can lead to lung and heart diseases in the local community
• • If the business decides to put prices up then customers may decide to:
  • Pay the higher prices
  • Buy less of the product or service
  • Buy from a competitor
  • If the business charges higher prices then they will make higher profits, but it maybe because the cost of raw materials has increased
• • Shareholders own a share of the business
  • Depending on how many share they have they may have voting rights or decision making rights in a business
  • Shareholders get paid dividends if the business makes a profit
  • Shareholders may insist the business cuts costs
• • Some community groups are known as pressure groups
  • They can lobby the government or local councils for change
  • They may object to a large company opening where it may have an impact on smaller shops