Stakeholder Model
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Stakeholder Model

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Stakeholder Model

Stakeholder Model

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Stakeholder Model Presentation Transcript

  • 1. The Stakeholder Model BTEC Business
  • 2. Pressures on Business
    • Competitive pressures – Modern business faces greater competitive pressure:
    • More open markets
    • Globalisation
    • Shareholders seeking ever higher profits
  • 3. Pressures on Business
    • Pressure of responsibility - G rowing importance to consumers of ethical business:
    • Total UK sales of Fair Trade products grew in 2004 by more than 50% to £140 million
    • Environmental legislation
  • 4. How Should Firms Respond?
    • ‘ Inclusivity’:
    • Take a wide view of why the firm exists
    • Recognise range of interest groups
    • Form partnerships with wide range of groups
  • 5. What’s Different About This?
    • Firms used to aim for maximum profits to keep shareholders happy
    • This was often against interests of groups outside organisation
    • Now, interdependence seen as vital
    • Partnerships with all interest groups
  • 6. What Does This Mean?
    • Difficult to balance the different short term demands of shareholders and stakeholders
    • Firms can benefit considerably from cooperating with stakeholder groups
    • Their needs can be built into the firm’s decision making processes
  • 7. Benefits Firms Can Expect
    • Better public relations
    • More favourable reporting of firm’s activities in media
    • Quality relationships with suppliers
    • Lower staff turnover
  • 8. Benefits Firms Can Expect
    • Higher employee motivation
    • Reduced impact of pressure groups on firm’s activities
    • But only if firm genuinely commits to stakeholder model.
  • 9. Meeting the Needs of Stakeholders BTEC Business
  • 10. What are Stakeholders?
    • Stakeholders are groups of people who have an interest in a business organisation
    • They can be seen as being either external to the organisation, or internal
    • But some may be both!
  • 11. Types of Stakeholder
    • Owners (I)
    • Shareholders (I)
    • Managers (I)
    • Staff or employees (I)
    • Customers (E)
    • Suppliers (E)
    • Community (E)
    • Government (E)
    • I = Internal
    • E = External
  • 12. Internal and External Stakeholders
    • Internal stakeholders are those who are ‘members’ of the business organisation
    • Owners and shareholders
    • Managers
    • Staff and employees
    • External stakeholders are not part of the firm
  • 13. But…..!
    • Some groups can be both internal and external stakeholders
    • Such as staff or shareholders who are also local residents
    • Can you think of any others?
  • 14. Characteristics of Stakeholders
    • 1. Owners and Shareholders
    • The number of owners and the roles they carry out differ according to the size of the firm
    • In small businesses there may be only one owner (sole trader) or perhaps a small number of partners (partnership)
    • In large firms there are often thousands of shareholders, who each own a small part of the business
  • 15.
    • 2. Managers:
    • organise
    • make decisions
    • plan
    • control
    • are accountable to the owner(s)
    Characteristics of Stakeholders
  • 16. Characteristics of Stakeholders
    • 3. Employees or Staff:
    • A business needs staff or employees to carry out its activities
    • Employees agree to work a certain number of hours in return for a wage or salary
    • Pay levels vary with skills, qualifications, age, location, types of work and industry and other factors
  • 17. Characteristics of Stakeholders
    • 4. Customers:
    • Customers buy the goods or services produced by firms
    • They may be individuals or other businesses
    • Firms must understand and meet the needs of their customers, otherwise they will fail to make a profit or, indeed, survive
  • 18.
    • 5. Suppliers:
    • Firms get the resources they need to produce goods and services from suppliers
    • Businesses should have effective relationships with their suppliers in order to get quality resources at reasonable prices
    • This is a two-way process, as suppliers depend on the firms they supply
    Characteristics of Stakeholders
  • 19.
    • 6. Community:
    • Firms and the communities they exist in are also in a two-way relationship
    • The local community may often provide many of the firm’s staff and customers
    • The business often supplies goods and services vital to the local area
    • But at times the community can feel aggrieved by some aspects of what a firm does
    Characteristics of Stakeholders
  • 20.
    • 7. Government:
    • Economic policies affect firms’ costs (through taxation and interest rates)
    • Legislation regulates what business can do in areas such as the environment and occupational safety and health
    • Successful firms are good for governments as they create wealth and employment
    Characteristics of Stakeholders