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- To consider who stakeholders are, To examine Stakeholder roles, To discover Stakeholder participation and how to manage stakeholders, To consider Stakeholder conflict and how to resolve it

Caroline Lamming-Chowen

on 3 October 2013

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Transcript of Stakeholders


- To consider who stakeholders are
- To examine Stakeholder roles
- To discover Stakeholder participation and how to manage stakeholders
- To consider Stakeholder conflict and how to resolve it

stakeholders are said to have an interest in an effort or organization based on whether they can affect or be affected by it.
Guidelines to manage Employee Stakeholders
employee interests are focussed on the business operations.
"Employees First, Customers second" Vineet Nayer, Business Executive
Treating employees as your most valued assets
promoting a nondiscriminatory work environment
actively involving employees in important decisions

Stress-relieving programms
Financial Satisfaction

Who is a "Stakeholder" ?
1- A party (person, group or organization) that has interest or concern in an organization.

2- Stakeholders are those who may be affected by or have an effect on an effort.

Primary Stakeholders
Primary stakeholders are the people or groups that stand to be directly affected, either positively or negatively, by efforts, objectives, policies or the actions of an agency, institution, or organization.
Example: investors, employees, suppliers
Secondary Stakeholders
Secondary stakeholders are people or groups that are indirectly affected, either positively or negatively, by efforts, objectives, policies or the actions of an agency, institution, or organization.
Example: Employees' parents, siblings, children, Environmental Activists, Pressure Groups
Key Stakeholders
Key stakeholders, who might belong to either or neither of the first two groups, are those who can have a positive or negative effect on an effort, or who are important within or to an organization, agency, or institution engaged in an effort.
Example: Legislators, government officials, Capital Investors, Senior Managers
what does it mean?
an interest in an effort or organization could be intellectually, academically, philosophically, or politically motivated attention.
The more they stand to benefit or lose by it, the stronger their interest is likely to be. The more heavily involved they are in the effort or organization, the stronger their interest as well.
Stakeholders Analysis
Stakeholder analysis (stakeholder mapping) is a way of determining who among stakeholders can have the most positive or negative influence on an effort, who is likely to be most affected by the effort, and how you should work with stakeholders with different levels of interest and influence.
what are the influence or roles of the stakeholder?
The people we’ve described as “key stakeholders” would generally appear in the upper right quadrant.
How to manage the influence of the stakeholders?
Influence Direction
The company's action or effort influence on Stakeholders
The stakeholder's influence on the company function, profit, image, ...

- Reducing employees ==> Workers Community ==> Local Economy
- Microsoft ==> Release new device ==> Stock Price Rise

satisfied employees provide strong customer service

Case Study, Shell
Shell employs over 100,000 people worldwide.
senior international managers specialising in finance, marketing, sales, oil and gas exploration and other aspects of the business.
geologists, market researchers, site engineers, oil platform workers, office administrators, business analysts and many more.

employees are influenced by Shell but also affect how Shell operates.
The employees' standard of work and commitment to health and safety and excellence is vital in order to keep Shell as a leader in the energy field. Mistakes can be costly in terms of reputation and the livelihood of other employees.

Provide its staff with good and safe working conditions and competitive terms of employment. This has a positive influence on employees as it keeps them safe and motivated.
Negative Side
According to Kotler,
Shell employees’ desire
to work for socially
responsible firms.
The first step in stakeholder management is to understand clearly where each stakeholder lies in the grid.
The next step is to set priority or to decide who needs the most attention based on the effort going to be taken.
expend most of your energy on the people who can be most helpful, i.e., those with the most power either interested or not.
Decide on the appropriate approach
So what is a Stakeholder?
According to the oxford English dictionary a stakeholder is;

"a person with an interest or concern in something, especially a business"
From this definition try and think of examples of stakeholders. Write one on each post it note.
Lets try to put them in order of importance
Now we know that there are 3 different types of stakeholder, lets have a go at sorting our original suggestions into the 3 groups. (Primary, secondary and Key)
Learning check
- To consider who
stakeholders are
Lets add a few more stakeholders to our chart
- Add the new stakeholders and fill out the information
- Who/What are they
- What influence/role might they hold?
also answer this for the stakeholders you thought up at the begining of the lesson
Lets add a bit
more information
For stakeholders to have power and influence, their desire to exert influence must be combined with their ability to exert influence on the business. The power a stakeholder can exert will reflect the extent to which:

• The stakeholder can disrupt the business’ plans
• The stakeholder causes uncertainty in the plans
• The business needs and relies on the stakeholder

Not all stakeholders are equal!!!

• Senior managers have more influence than environmental activists
• A venture capitalist with 40% of the company’s share capital will have a greater influence that a small shareholder
• Banks have a considerable impact on firms facing cash flow problems but can be ignored by a cash rich firm
• A customer that provides 50% of a business’ revenues has significantly more influence than several smaller customer accounts
• Businesses that operate from many locations across the country will be less relevant to the local community than a business which is the dominant employer in a town or village
• Governments exercise relatively little influence on many well-established and competitive business-to-business markets. However their power is much stronger over businesses in markets which are regulated (e.g. water, gas & electricity) or where the public sector has a direct stake (e.g. retail banking)
• Employees have traditionally sought to increase their power as stakeholders by grouping together in trade unions and exercising that power through industrial action.
Learning Check
- To examine Stakeholder roles/ influence
Lets have a go at managing our stakeholders
- In Pairs copy a stakeholder analysis quadrant
- Decide on a stakeholder for each quarter
- Consider how you would manage each stakeholder and how important they are
- use Stratford-upon- Avon College as an example
Learning Check

- To discover Stakeholder participation and how to manage stakeholders
Stakeholders can come into conflict with one another

- Look at the stakeholders you listed, why might these people come into conflict?

- Employees and venture capitalists
- Environmental Activists and Venture Capitalists
- Big Customers and Senior Managers

Can you think of any more?
Propose ways of managing these stakeholder disagreements ( Managing BT "British Telecom)

1. As part of its Next Generation Access programme, the company needs to install new optical fibre cables to be able to provide super-fast broadband services across the country. This may be welcomed by customers, who will get a better service, but may cause disruption and traffic delays due to roadworks while the cables are being laid.

2. BT's investment in community activities might be contentious. Some shareholders may object to the company investing in activities that will not contribute directly to profits.

3. Another potential clash results from BT's pricing policy. Customers naturally want low prices, but shareholders may feel that higher prices would generate greater profits.

4. BT has a policy of no compulsory redundancies. This provides security for employees. However, shareholders may feel that the policy could adversely affect the company’s profitability and performance.
Learning Check
- To consider Stakeholder conflict and how to resolve it
“using what you have learnt so far in stakeholders, analysis and management”
- Design a set of guidelines for managing;
- Investors
- Community
- Activists
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