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Chapter 3

ADM 1301 Chapter 3: 09.20.15 (ch. 3) pdf


Department
Administration
Course Code
ADM 1301
Professor
John Palmer
Chapter
3

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Sunday, September 20, 2015
ADM 1301 Chapter 3
Identifying Stakeholders and Issues
3.1 THE STAKEHOLDER CONCEPT AND BUSINESS
in Canada, business operates in a pluralistic social system
a variety of groups and institutions use power/influence to represent the interests of particular
groups of citizens
pluralistic society: one where influence/power is decentralized by dispersing it among a variety of
institutions
no one institution is completely independent of others
business is subject to the influence of other institutions in society and must respond to the various
participants in society (stakeholders)
3.2 DEFINING AND IDENTIFYING STAKEHOLDERS
stakeholder: an individual/group who can influence and/or is influenced by the achievement of an
organizations purpose
important for managers to identify the complete array of stakeholders for 2 reasons:
1. to obtain resources, business has to recognize the groups that control scarce resources
2. the support of other groups is required to maintain the legitimacy of business as an institution
in society
the complexity of business is often due to changing relationships between a corporation and its
stakeholders
corporations must understand how their activities influence stakeholders and also how stakeholders
can influence their activities
IDENTIFYING STAKEHOLDERS
Owners:
those who have invested in the form of shares
Directors:
elected by shareholders to represent their interests
the purpose of a board of directors is to determine the corporations strategic direction, monitor and
review corporations performance, and hire/fire top executives
Employees:
individuals who work for the corporation
most obvious, perhaps most important stakeholders
critical for the operation of the corporation
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Sunday, September 20, 2015
Customers / Consumers:
members of the public, other corporations, or governments
source of revenue for corporation
today, instead of consumers influencing production decisions, producers influence/determine what
consumers will purchase
Lenders and Creditors:
this stakeholder has substantial influence: if the lender is not paid as agreed upon in the contract,
the corporations assets can often be seized
Suppliers:
other corporations that provide raw materials, parts, or finished materials
Service Professionals:
not employees of the corporation but provide services on a fee-for-service basis (ex. lawyers)
Dealers, Distributors, Franchisees
Business Organizations:
corporations join together to form hundreds of organizations to represent their interests
Competitors:
firms that sell the same products
Joint-Venture Participants:
partners cooperating in a particular enterprise/project
Non-Governmental Organizations (NGOs):
any group outside of the public and private sectors that holds shared values/attitudes about an
issue confronting society
Society at Large:
represents the general public; views of society
Educational Institutions:
educate not only employees but also the general public
businesses rely on these institutions to provide it w/ educated, skilled employees
Religious Groups:
churches often speak out on issues related to business
Charities:
charitable organizations receive some of their funding from corporations, in return the business
donors expect careful stewardship of the funding
Media:
the media cover events associated w/ business
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