|
Investors affect a currency's exchange rate
Photograph: CIMA
|
Objectives:
-
To understand that every business has a wide variety of stakeholder groups with
conflicting interests
-
To understand why foreign exchange can cause problems for businesses
-
To understand that different stakeholders have different levels of power
-
To understand that stakeholders operate through a range of pressure groups
-
To understand the potential costs to a business of an adverse publicity
campaign
Stakeholder groups
Businesses, like people, are part of the world community and as such have
responsibility for the activities carried out in their name.
Businesses are also responsible to a range of stakeholders
with often differing and conflicting aims. For example an electronics
manufacturer might have the following stakeholders:
| Stakeholder group |
Objectives of stakeholders |
| Shareholders |
to maximise profits of the business, dividends and the value of shares |
| Employees |
to maximise salaries and job security |
| Customers |
value for money, good quality products |
| Distribution outlets |
minimise costs of goods, maximise sales |
| Commodity brokers |
maximise profits, through maximising the difference between the price of the
materials that are used to produce electronics and the price of sale to the
manufacturers |
| Manufacturers of materials |
maximise price for the materials that they supply to the electronics
manufacturers |
If you study this stakeholder list you will note that:
-
different stakeholders have different levels of power eg the shareholders are
probably more powerful than the material manufacturers
-
many of the stakeholder objectives conflict with other stakeholder objectives,
eg the shareholders cannot maximise their profits/dividends if the employees
maximise their salaries and the material manufacturers maximise the price for
their materials
Because of these imbalances in power, some stakeholder
groups are supported by or form pressure groups: employees often join trade
unions, consumers are supported by consumer groups such as national consumers'
federations, and retailers form groups such as food retailers' associations.
Governments form quasi-independent organisations such as Ofcom to regulate an
industry.
In the Shinkendo Oi Case Study the team had conflicting views over a number of issues:
- whether to modify existing software
- whether to develop new software
- whether to outsource software development
- how to market the console and software
The majority of the employees are not the right people to solve these dilemmas, but it does need to be done by your group as the main protagonists are the people you are going to be working with.
Look at the websites of interactive entertainment companies in both the UK and North America. How have they dealt with these issues?
|