Stakeholdes and Relationships between stakeholders.

2. Stakeholders and Relationships.

Stakeholders

Lots of people are affected by how a business is run. These people are called Stakeholders.

·      The main stakeholders in any business are.

Entrepreneur – Person who set up the business.

Investors – The person who gives the money (capital) to set up the business.

Employer – The person who hires others to work for him.

Employee – The person who works for an employer in return for a wage.

Producer- A business that turns raw materials into finished products. (taytos: spuds to crisps)

Consumer- The person who buys stuff from the business.

Service provider-  eg. ESB

Interest Group- A interest group is an organization of people who come together and campaign for a common goal. IBEC – Irish business and employers confederation. IFA – Irish farmers association.

Relationships between Stakeholders

All the different stakeholders in a business have a relationship with each other. There are 4 types of relationships.

Co-operative Relationship

A co-operative relationship means that the parties in business have the same objective  so they work together and help each other to achieve their goals.

This produces better results than if they worked against each other or alone.

Describe a co-operative relationship between a Employee and a Employer:

If a business is going through a bad time, Employers and Employees could work together to save the business as it benefits both the Employer and the Employees.

The employees agree to take a temporary pay cut in exchange for shares in the business. The employer will give the employees shares, the employees will take a temporary pay cut. The business survives. This happened with Aer Lingus.

Describe a co-operative relationship between two producers in the same line of business:

In the 90’s Ford and Mazda had a co-operative relationship. They formed a strategic alliance to develop a new car. The Ford fiesta / Mazda 121 was formed. They shared the costs of developing the car, and because they shared ideas they came up with the best possible car.

Competitive Relationship

A competitive relationship means that one stakeholder/party in business wants to be more successful than another. Only one of them can win and so they become rivals.

Describe a competitive relationship between two employees:

Two employees may compete within a business for a promotion. Each will try to work harder and impress the boss in order to get the promotion.

Describe a competitive relationship between a employee and a employer.

Employees and employers can compete. Employees want a secure job, where as the employer may want to make redundancies (sack people) to save money. Eg. ESB announced that they wanted to close down 3 plants. The employees union said they would not let this happen. They both fought for what they wanted.

Describe a competitive relationship between two producers/business’ in the same line of business:

Ryanair and Aer Lingus are always competing with each other to win over customers. When one announces a cheap fare, the other one brings out a cheaper fare again.

Also when one releases an advertising campaign, the other one brings out a new advertising campaign showing that it is better, cheaper etc. This is called comparative advertising.

Dependent Relationship

A dependent relationship means that the stakeholders/parties in business need each other in order to be successful. They can not achieve their goals on their own and rely on the other party to provide them with what they need so they can be a success.

Describe a dependent relationship between a Consumer and Producer.

Consumers need producers to make the products they want, eg. taytos, cloths, booze etc. Producers depend on consumers to buy the products so that they can make a profit.

Describe a dependent relationship between a Investor and a Entrepreneur.

A Entrepreneur who has a idea depends on a Investor to fund their business idea. The investor depends on Entrepreneurs to come up with new good ideas to make money.

Dynamic Relationship

This means that the relationship between the stakeholders is constantly changing. It is sometimes competitive and it is sometimes co-operative.

Eg. Pepsi and Coke have a strong competitive relationship with each other, Somebody offered to sell Pepsi cokes secret ingredient. Pepsi immediately notified coke of this. This is a example of a Dynamic relationship.