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Week 3: Stakeholders and External Environment

This document discusses stakeholders and the external environment. It defines stakeholders as groups impacted by an organization's decisions, even if they don't own shares, such as employees, managers, shareholders, customers, suppliers, government, creditors, and special interest groups. It describes analyzing stakeholders' interests and how they may conflict. It also explains using STEEPLE analysis to evaluate social, technological, economic, environmental, political, legal, and ethical factors influencing an organization.

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Linh Anh Nguyen Ngoc
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43 views

Week 3: Stakeholders and External Environment

This document discusses stakeholders and the external environment. It defines stakeholders as groups impacted by an organization's decisions, even if they don't own shares, such as employees, managers, shareholders, customers, suppliers, government, creditors, and special interest groups. It describes analyzing stakeholders' interests and how they may conflict. It also explains using STEEPLE analysis to evaluate social, technological, economic, environmental, political, legal, and ethical factors influencing an organization.

Uploaded by

Linh Anh Nguyen Ngoc
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Management and organization

Week 3: Stakeholders and External environment


I, STAKEHOLDERS
- Define:
+ Many protests were organized by political parties and others

+ Even though these people do not have a financial share in the


organization, they feel that decisions can impact them
- Common stakeholder groups are:
• Employees
• Managers
• Shareholders
• Customers
• Suppliers
• Government
• Bank and other creditors
• Special interest groups
• Competitors
- Stakeholder concept:
• In the traditional view of business, the primary task of managers is
to keep shareholders satisfied
• In recent times, this view has been extended to also include
suppliers, employees and customers
• This view is still limited. Nowadays, managers need to think of all
these groups and interest groups such as government, local
communities, pressure groups etc.
- Shareholder concept of theory

There are many other parties involved and interested in business activity
and that the interests of these groups (local communities, the public,
government and pressure groups such as environmental lobbyists)
should be considered by business decision-makers.

- The different group of stakeholders

Internal stakeholders External stakeholders


- Employees - Customers
- Managers - Suppliers
- Shareholders - Government
- Banks and other creditors
- Special interest groups
- Competitors

- Stakeholders’ interests

- This differs per group

- It is rare for all stakeholder groups to be positively or negatively


affected by an organizational decision
- On stakeholder group can also be both positively and negatively
affected. This can result in stakeholder conflict
- It is up to the manager to deal with these conflicts as well as possible

Stakeholders’ interests Business’s responsibilities to

stakeholders
Employees • Employment security • Adhere (follow) to country’s laws
• Wage levels and benefits • Provide training, job security,
• Conditions of employment working conditions

Managers • Employment security • Job security


• Wage levels and benefits • Competitive salary level
• Responsibilities offered and
status

Shareholder • Annual dividends • Incorporated business should be


s • Share price rising over time operated according to law
• Annual accounts presented to
• Security of investment
shareholders
• Strategies taken to increase
shareholders’ value over time

Customers • Value for money • Not to break any law regarding


• Product quality and safety consumer protection
• Guarantees ( đảm bảo) • Don’t take advantage of
• Service levels vulnerable customers

Suppliers • Speed of payment • Establish effective two-way


• Level and regularity of orders relationships that are of benefit to
• Fairness of treatment the business and suppliers

- How to solve stakeholder conflicts

+ Through compromise

• A plant is closed slowly


• An airport can introduce 24-hour flights if surrounding
homes get better insulation against sound
+ It’s the job of the manager to set priorities;
• Who are the most important stakeholders?
• What is the cost of meeting the needs of each
stakeholder group?
• Will failure to meet the stakeholders’ group lead to bad
publicity?
II, STEEPLE analysis
- Social: Social factors include population size and structure, lifestyle, age
groups and education levels
- Technological: Factors include the state of the technological advancement
and introduce of new technologies
- Economic: Factors such as the GDP growth rate, inflation rates, interest
rates, exchange rates
- Environmental: Includes weather and climate of the region, the flora and
fauna of the region, environmental pressure group activity.
- Political: Type of government, ideology, etc
- Legal: The legal factors include any law influencing business activity, e.g.
competition, law, health and safety at work, consumer protection, employee
protection.
- Ethics: General code of ethics followed by most people in the country.

Social and cultural influence


Changes in many countries include:
• Aging population
• Changing role of women
• Improved educational facilities
• Early retirement
• Rising divorce rates
• Job insecurity
• Increase levels of immigration

Technology

A simple definition of technology: “the use of tools, machines and


science in industry”
New technology can impact:
• New product development
• Improve stakeholder communication
• Developing new and better processes
• Cost benefits
• Competitive advantage
• Outsourcing and offshoring
Economic influences
Main economic influences and government policies:
• Economic growth and Recession

• Interest rates – the use of monetary policy

• Exchange rates

• Tax changes

• Unemployment

• Inflation

Environmental influences
Environmental influences include:
• Environmental controls such as waste disposal, use of

sustainable energy

• Threats from natural events

• Natural resources

• Infrastructure

Political influences
Political influences include:
• Government stability

• Form of political structure

• Government’s attitude toward private ownership

• Trade policies and membership of free-trade areas


Legal influences

Legal influences include:

• Employment laws

• Consumer protection laws

• Business competition laws

• Political changes resulting form a new government

• Major policy changes

Ethical influences
Ethical influences include:
• Child labour

• Corruption in business practices

• Advertising and promotional material and the advertising of

products directly to children

McDonald’s STEEPLE Analysis

Social:
- Changing customer demographics mean that needs to meet the
changing demands (e.g. diet, obesity)
- Lots of teenagers on lower wages
- Busy lifestyles in urban environments fits the companies mission

Technological:
- Internet enables cheaper marketing
- Online marketing might means bad publicity (threat) or Greater
presence on the internet (opportunity)
- Various channels for ordering (online orders)
Economical:
- International, national, and local economic factors might influence
the company
- Benefited by an economic crisis due to low prices
- One Dollar/Euro menu could attract low-income consumers
- Long-term recessions may force consumers to eat an home
Environmental
- Shifted on to not only reporting on finance but environmental and
ethical
- Create a better public image by using sustainable products
- Intense scrutiny on environmental ethics on the fast food industry
Political:
- International, national, and local political factors might influence
the company
- Follow government policies and introduce healthier and vegetarian
options
- Strict new laws regarding health regulations again fast-food
industry
Legal:
- Many health and safety policies
- Employment law (minimum wage, holiday and sick pay) may
increase the costs
- Lawsuits that can cause bad brand image
Ethical
- Pay employees minimum wage and provide good working
conditions
- Introduce health conscious and vegetarian menu
- Use recyclable packaging

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