Business Stakeholders: Roles, Conflicts, and Mapping

Economy and Stakeholders

Stakeholders are people who have a direct impact on a business because the actions of the business affect them.

Two Main Types of Stakeholders

• Internal: People who work within the business.
• External: People outside of the business.

Stakeholder Interests

Internal Interests

• Shareholders: Return on investments.
• CEO: Coordinating business strategy and delivering profit and returns to satisfy shareholders.
• Senior Manager: Strategic objectives.
• Middle Manager: Tactical objectives.
• Foreman: Organizing tactical objectives and formulating operational plans.
• Employees: Protecting their rights and working conditions.

External Interests

• Government: How the business operates.
• Suppliers: Stable conditions.
• Customers: Meeting their needs.
• People in Local Community: The impact of the business.
• Financiers: Returns on their investments.
• Pressure Groups: Impact on their specific area.
• Media: Impact of the business in terms of news.

Competitors

Competitors are rival businesses of an organization. They are invested in the activity of a business for several reasons: rivalry can provide an incentive for the business to be innovative; they must know and respond to their practices; and they compare profit and market share.

Shareholders or Stockholders

Shareholders are a powerful stakeholder group with voting rights and a say in how the company is run. They are entitled to a share of the profits.

Two Primary Objectives:

• Maximize dividends (earning a proportion of the company's profit).
• Achieve capital gain.

Managing Stakeholder Conflict

Because different stakeholders have different interests, a business cannot meet the needs of all simultaneously. A common cause of conflict is remuneration (pay and benefits) versus a finer distribution of profit. Additionally, some stakeholders may have more than one role.

How to Deal With Conflict?

There are three key issues to consider when resolving conflicts:

• Set priorities: For example, determining if the local community is the most important factor.
• Aims and objectives of the business: Deciding which goals have higher priority.
• The degree of power: Assessing the level of influence each group holds.

Mutual Benefit of Stakeholder Interests

There are mutual benefits in simultaneously meeting the competing needs of different stakeholders.

Stakeholder Mapping

• a. Minimal Effort: (Minimal interest + minimal power). Businesses tend to ignore this group.
• b. Keep Informed: Make this group feel important.
• c. Keep Satisfied: These groups have the power of influence.
• d. Key Players: The most important group. Consult with them on all matters and focus on their needs.