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The Corporation And Its Stakeholders Essay

1198 words - 5 pages

Chapter 1

The Corporation and
Its Stakeholders

Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

Ch. 1: Key Learning Objectives
 Understanding the relationship between business and
society, and the ways in which they are part of an
interactive system
 Considering the purpose of the modern corporation
 Knowing what is a stakeholder and who a corporation’s
market and nonmarket and internal and external
stakeholders are
 Conducting a stakeholder analysis, and understanding
the basis of stakeholder interests and power
 Recognizing the diverse ways in which modern
corporations organize internally to interact with various
...view middle of the document...

2 The Stakeholders of Business


Figure 1.3 A Firm and Its Stakeholders


Stakeholder Analysis
 It is part of every manager’s job
 Process whereby identify relevant stakeholders
and analyze their interest and power

 Asks 4 questions:

Who are the relevant stakeholders?
What are the interests of each stakeholder?
What is the power of each stakeholder?
How are coalitions likely to form?


Stakeholder Analysis – Question 1
Who are the Relevant Stakeholders?
 Answer this question by drawing market and nonmarket
stakeholder maps
 Recognize that not all of groups are relevant to every
 Examples:
• Some businesses sell directly to the public and will not have
• A certain stakeholder may not be relevant to a particular


Stakeholder Analysis – Question 2
What are the interests of each stakeholder?
 Analyzing stakeholder interests includes addressing:
 What are the groups’ concerns?
 What does the group want/expect from their relationship with
the firm?

 Examples:
 Stockholders have an ownership interest, they expect to receive
dividends and capital appreciation
 Customers are interested in gaining fair value and quality in
goods and services they purchase
 Public interest groups advance broad social interests


Stakeholder Analysis – Question 3
What is the power of each stakeholder?
 Stakeholder power is the ability of a group to use
resources to make an event happen or to secure a
desired outcome

 There are 4 types of stakeholder power:

Voting power
Economic power
Political power
Legal power
Informational power


Stakeholder Analysis – Question 4
How are stakeholder coalitions likely to form?
 Stakeholder groups often have common interests and will
form temporary alliances to pursue these common
 Coalitions are very dynamic (can change at any time)

 Coalitions...

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