Conflicting objectives of stakeholders Owners want to maximise

Conflicting objectives of stakeholders

• Owners – want to maximise their returns • Directors and managers – have mixed motives, work partly to maximise their own pay and remuneration package. • Workers – have little interest in the objectives of the owner, they want higher wages, good working conditions

• Customers – want the best price and the highest quality, good customer service, however this will lower the dividends paid to shareholders • Suppliers– want to charge high prices to the business to maximise profit on the other hand the business wants to minimise the price to maximise profits • Community and government – tend to welcome jobs, taxes and prosperity however do not like the environmental damage that the business causes

• Environmental groups – tend to see businesses as a necessary evil, businesses want to see fewer environmental regulations and more spending on infrastructure like roads. Environmental groups tend to lobby against business expansion.

Cost and benefits to businesses adopting stakeholder approach

• Have good employment policies to attract better applicants and motivate and retain existing staff leading to increased profits • Effective customer care policies • Working well with suppliers to obtain value for money and reducing problems • Putting something back into the community – giving to charities, taking on workers, backing training projects

• Being environmentally friendly – could lower overall costs – sustainability • Becoming more socially responsible, creating better public relations leading to higher profits