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03a e3 managing stakeholders lecture notes
- 1. Enterprise Strategy/AW/03a Arj Wignaraja
- 3. CIMA Official Terminology: STAKEHOLDERS Stakeholders are persons and organisations that have an interest in the strategy of the organisation. Stakeholders normally include shareholders, customers, staff, and the local community. For an organization, one of the keys to a successful business strategy is identifying relevant stakeholders, engaging with them, and being aware of their particular needs and interests.
- 4. Type of Power Example Expertise Doctors, Anesthetists Control over access to resources Hospital Budget Manager Control over access to information Records Management Officer Physical strength Porters Preparedness to fight/confront Nurses Union Representative Charisma Consultant Networks or relationships Those with membership of a professional body
- 5. Economic • Be profitable Legal • Obey relevant laws • Do what is right, just, and fair and to avoid Ethical harm. Discretionary • Be a good corporate citizen
- 6. Level of Interest Low High A. B. Low Minimal Keep Effort Informed Power C. D. High Keep Key Players Satisfied Aubrey Mendelow, 1991
- 7. 800 manufacturing jobs Wiltshire, UK Malaysia £9/hour £3/hour +67% £114 sq m/year £38 sq m/year
- 8. Stakeholder Power Interest Outlook Casual unskilled L L (-) Non-unionised labour L H (-) Skilled union labour H H (-) R&D staff H H (-/+) Key managers H H (-) Local council L H (-/+) Central government H L (-) Customers H L (-/+)
- 9. Stakeholder Power Interest Outlook Small shareholders L L (+) Minor fund managers H L (-/+) Major fund managers H H (-/+) Small local suppliers L H (-) National suppliers H H (-) Local press & media L H (-/+) National media H L (-) General public L L (-)
Editor's Notes
- Government did not factor in key stakeholders and their reaction when proposing the bill. Overconfident, didn’t do it’s homework.Major stakeholder – FTZ workers and their trade unions. What makes them extra special? Linked to foreign investors in the FTZ, and also ability to hinder traffic to airport. (German Ambassador writes to Defense Secretary on adverse impact of violence).JVP capitalizes on the opportunity. UNP late to the party. Weak opposition links to powerful stakeholder.Police become a stakeholder after the fact and are left holding the bag! Inspector and Sub-inspector accused of shooting live ammunition. IGP “resigns”. June 2011:The clash between the protesters and the police resulted in injuries to over 150 people including 15 police officers and the death of a 22-year old FTZ employee – RoshenChanaka.
- People and organisations who influence the activities, resources and the objectives of an organisation. They are affected by, and feel they have a right to benefit, or be in agreement with the organisation's particular strategic objectives and behaviour.
- Economic: e.g. the responsibility to generate an acceptable rate of return for the shareholders.Legal: e.g. the responsibility to file audited financial reports with government agenciesEthical: e.g. the responsibility to avoid practices that might pollute or cause ecological damageDiscretionary: e.g. whether the company should devote some of its resources to a community in which they have a key plantOnce the power and expectations, and therefore the stakeholders' likely interest, have been established we can use a power interest matrix to assist the analysis.
- A: Minimal effort is expended on stakeholders in box A because they have a low level of interest and have little power.B: The stakeholders in box B, who have a high level of interest but little power, cannot influence strategy greatly but may influence more powerful stakeholders. They must be kept informed.C: The stakeholders with a lot of power and a low level of interest in box C should be treated carefully as they are capable of moving into box D.D: Stakeholders in box D have high levels of power and interest and are the key players. They must be kept satisfied and the organization’s strategies should be acceptable to them.
- In 2002, Dyson reverses its longstanding strategy of UK production, and moves its manufacturing to Malaysia. R&D remains in the UK. Malaysia is not only cheaper for labor and rent, but closer to many of Dyson’s South East Asia parts suppliers. And Malaysia well situated in global shipping routes to supply US market.