IB Business and Management

1.4 Stakeholders and Stakeholder Conflict

Learning Outcomes

• Explain the interests of Internal Stakeholders

• Explain the interests of External Stakeholders

• Discuss possible areas of conflict between stakeholders

• Evaluate possible ways to overcome stakeholder conflict

What is a Stakeholder

• Any individual or organisation that is interested in or affected by activities of a business

• Who might stakeholders be?

External Stakeholders

Suppliers Customers

Competitors Special Interest Groups

Internal Stakeholders

EmployeesShareholders

Managers

GovernmentLenders

Media

Local Community

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’

Special Interest Groups

• Special interest groups are organisations who may become interested in the business spontaneously if the business undertakes certain practises:

• Trade Unions• Pressure Groups• Industry Trade groups

Stakeholder Mapping – Johnson and Scholes

Which Stakeholders would be likely to fit into these quadrants?

Who are the most important Stakeholder Group?

• Shareholders?• Employees?• Customers?

• What arguments could you form to support each of these stakeholders being the host important?

Task In Pairs

• Pick a recent news article based on a strategic decision

• Good examples are:• Takeover/merger• Job losses• Expansion• Flotation on the Stock Exchange

Task – In PowerPoint

• Identify the stakeholder groups in this situation

• Identify the key interests and objectives of each of the stakeholders in this situation

• Place each stakeholder on the Johnson and Scholes map

• Identify any ‘stakeholder conflicts’• Make suggestions about what you think

could be done in order to appease as many stakeholder groups as possible

Milton Freidman – Shareholder concept

• Some theorists (Milton Friedman for example) say that a business’ only responsibility is to maximise profit

• Is it the government’s job to be socially aware?

• Should a business only be socially responsible as long as it generates the maximum profit?

Resolving conflict

• Good communication• PR• Arbitration and Negotiation (ACASA)