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1.4: Stakeholders (Stakeholder Conflict: (Stakeholders have varying vested…
1.4: Stakeholders
Stakeholder Conflict:
Stakeholders have varying vested interests in groups, which can result in conflicts as an organisation cannot simultaneously meet the needs of all its stakeholders.
$ is often a driving factor behind conflict. Some stakeholders also may have more than one role in a business - differing objectives lead to friction between stakeholder groups.
To deal with conflicting stakeholders, a business must examine: the type of organisation in question (e.g. charity vs partnership); the firm's aims and objectives; the source and degree of power/influence of each stakeholder group.
Different organisations will deal with stakeholder conflicts differently, based on leadership style and organisational culture.
The outcome of any conflicting stakeholder negotiations is the relative bargaining power of each of the parties involved.
All forms of conflict, particularly stakeholder conflict, exists in every organisation. Most businesses aim for a 'best-fit' compromise so that all stakeholder groups are as satisfied as possible.
Internal Stakeholders:
Are the members of an organisation, including: employees, managers + directors, shareholders.
Employees: are likely to strive to improve their pay, working conditions, job security and opportunities; have a vested interest in the firm's success - they remain employed. A motivated workforce is more dynamic + loyal.
Managers = daily functioning; directors = whole company. Sr. managers + directors seek to ^profits to ^personal benefits - this then pleases shareholders, keeping senior executives employed - Sr. staff examine the long-term fiscal health of the form.
Share/stockholders have voting rights in the companies they've invested in and are .-. a powerful stakeholder. They have two main objectives: maximise dividends and achieve a capital gain.
External Stakeholders:
External stakeholders are not part of the business but have a vested interest/involvement in the firm. Includes: customers, suppliers, pressure groups, competitors, the government.
External stakeholders such as pressure groups now have an increasing influence on the running of a business - due to greater public awareness, it is now more difficult to ignore ethical issues faced by the firm.
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Fringe Stakeholders:
Are those who cannot directly impact the firm, but who can voice their concerns.
Stakeholder Mapping:
Stakeholder mapping is a model that assesses the relative interest of stakeholders and their relative bargaining power, and how they should be best dealt with: D is first priority, A is the last.
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