Airport Decision Making Essay

1428 words - 6 pages

Stakeholders are those groups or individual in society that have a direct interest in the performance and activities of business. The main stakeholders are employees, shareholders, customers, suppliers, financiers and the local community. Stakeholders may not hold any formal authority over the organization, but theorists such as Professor Charles Handy believe that a firm’s best long-term interests are served by paying close attention to the needs of each of these stakeholders. The modern view is that a firm has responsibilities to all its stakeholders i.e. everyone with a legitimate interest in the company. These include shareholders, competitors, government, employees, directors, ...view middle of the document...

The second stakeholder group is shareholders. The shareholders employ people to run the company on their behalf. They have nothing to do in the business, they are just investing in the company and they are only concerned about their dividends which they get as a profit in the end of the year. In this case they will be quite happy because as the building of the second runway profits will rise and they will get more dividends. They just want to use cost-effective production i.e. reduce the costs as much as possible in order to build the second runway and make the prices higher.

The third stakeholder group is suppliers. “Suppliers can sometimes be critical to business success. This often occurs where vital inputs are in scarce supply or it is critical that supplies are delivered to a company on time and in good condition.”(Palmer. A and Hartley R.:2002:152). They want long-term guaranteed contracts and to be paid promptly. However, firms that are excessively focused on short-term profits may delay the paying and use different suppliers to drive down the prices but in this case; they have to have good contacts with their suppliers to get the material on time and have to pay them promptly. Their suppliers will be affected as it is a long-term growth and will lead them to more orders if they provide with low prices otherwise, they can change their suppliers who offers them lower prices.

The fourth stakeholder group is employees. They want secure employment, good working conditions and a high salary. This is likely to cause most conflicts with shareholders particularly when they move from labour intensive towards capital intensive when constructing a second runway i.e. use of more technology other then use of labour and shareholders want redundancies to maintain their profits. When the employees will get redundant this will have a negative effect on the rest of the employees, they might be thinking of the same that they can become redundant anytime and will not work efficiently. But with this expansion they may see an increase in their salaries due to increase in profits. And they will pay less attention to the existing employees due to increase in the staff. And there will more jobs for the local community.

The fifth stakeholder group is local communities. They want job for the community which will be happening when constructing the second runway; the business will increase for the local markets as there will be more tourists and they will pay attention towards the improvement of the infrastructure. But all this have negative effects as well, i.e. due to the increase in the air traffic there will be a lot of noise pollution and disturbance for the people living nearby and they might not want this to happen. As building of the second runway will cause an increase in the road traffic and it will harder for the people to get to their homes.

Another stakeholder i.e. government which want business to be responsible and successful as it...

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