STAKEHOLDER and BUSINESS ENVIRONMENT

1
STAKEHOLDERandBUSINESS ENVIRONMENT
2
Schematic Presentation

• Business Firm View
• Stakeholder Analysis
• Business Interaction
• Business Environment

3
Business Firm View

• Traditional View
• Business as Economic Institution
• Business as Sociopolitical Institution
• Systemic View
• Business as Multipurpose Institution

4
Traditional View

• Business as Economic Institution
• Business as economic entity that interact with
  society only through transaction in the
  marketplace
• Business as Sociopolitical Institution
• Business as sociopolitical entity that interact
  with society through complex interaction for
  increasing wealth and prosperity of society

5
Business as an Economic Institution
Choice of Employees
Price Product Quality
Business Firm
Quantities of Output
Uses of Resources
6
Business as Sociopolitical Institution
International Environment
Changes in Ideologies Values

• Increased Govt.
• Intervention
• Statutory Law
• Admnistrative Law

Upgrading of Ethical Standard
Increased Influence of external or
public Interest Group
Business Firm
Increased Importance of Internal Stakeholder Group
Changing Att.of Society toward Business
Improved Communication Increased Impt of Media
7
System View of Business

• Business as an living organism that interact with
  and affected by environment for economic and
  social motive ( multipurpose motive ) by using
  the limited resources
• Key To Survival is
• Capacity to adapt efficiently the changing
  condition posed by the environment

8
Business as Multipurpose Institution
Economic Response

• Government
• Political Action
• Legislative Act
• Judicial Action
• Regulatory Act

Market Process
Efficiency
Market Competition

• Business
• Economic
• Social
• Political

Market Competition

• Business
• Economic
• Social
• Political

Market Competition
Stakeholder Expectation
Stakeholder Expectation
Stakeholder Expectation
Public Policy Process
Equity
Sociopolitical Response
9
Stakeholder?

• All the groups affected by a corporations
  decision and policies
• Primary
  Secondary

10
Primary Stakeholder
Employees (union)
Stockholder
Wholesaler Retailer
Skill
Distribute
Capital
Business
Creditor
Competitor
Lend Money
Compete
Material
Money
Customer
Supplier
11
Nature of Interest and Power
Interest
Power Stockholder - Return/Dividend
- Exercising Voting Right
- Capital Gain -
Exercising right to inspect

book and record Employee - Stable
employment - Strike
- Fair pay -
Union bargaining power
- Safe and comfortable - Publicity Creditor
- Repayment of loan - Calling in
loan - Interest
-Take over loans
collateral Supplier - Regular order
- Refusing to meet order
- Paid promptly -
Supplying to cometitor Distributor - Good
product quality - Buying from competitor
- High reliable product
- Boycotting company Customer - Fair
exchange - Purchasing from
competitor - Safe
reliable product - Boycotting company Competitor
- Be profitable -Forcing
tokeep up - Gain a
larger market - Charge lower price
12
Secondary Stakeholder
Local Communities
Local Communities
Local Communities
Local Communities
Local Communities
Local Communities
Local Communities
Central/Local Govt.
General Public
General Public
Central/Local Govt.
General Public
Central/Local Govt.
General Public
Central/Local Govt.
General Public
Central/Local Govt.
General Public
Central/Local Govt.
General Public
Skill, Environment
Opinion
Regulation Tax
Business
Foreign Govt.
Friendly Hostile
Foreign Govt.
Foreign Govt.
Foreign Govt.
Foreign Govt.
Business Support
Services
Business Support
Image, Publicity
Social Demand
Media
Media
Media
Social Activist
Social Activist
Social Activist
Social Activist
13
Nature of Interest and Power
Interest
Power Local Com. - Employ Local
residents - Restricting operating licenses
-
Environment is protected - Lobbying government
for - Local area is
developed regulation of the company Social
- Ensure that company -
Publicizing the negative issues Activist
conform to legal and - Lobbying
government for
ethical standard regulation
of the company Media - Keep the public
informed - Publicizing the negative issues
on all issues
- Monitor the company Business
- Provide services and - Assist
company in business Support
information endeavor dev.
effort Government - Taxes
- Regulation, licenses, permit
- Economic development
- Boycotting company Foreign Gov. - Economic
development - Permit to do business
- Social improvement
- Regulation General - Social value
Protected - Support activist Public
- Prosperity for society - Condemn
or praise company -
Risk minimized - Press
government to act
14

Interactive Model of
Business-Government-Society
Business
Government
Society
15
Interactive Model of Business
Market
Non Market
Local Communities Central/Local Govt. Foreign
Govt. Social Activist Media General
Public Business Support
Stockholder Employee Creditor Supplier Distributor
Customer Competitor
Business Firm
16
Business and Consumer

• Business Consumer
• Market
• Monopoly
• Oligopoly
• Free Market

17
Free Market System
Business Firm
Consumers
Needs Wants
Good Services
Competitive Price Voluntary Exchange
Supply
Demand
Satisfaction
Profit
18
Consumer Bill of Right

• Right to safety
• Right to be informed
• Right to choose
• Right to be heard

19
Protection to the Consumer

• Legal Liability to Consumer
• Privity of contract
• Warranties
• Tort Liability
• Consumer Legislation
• Provide consumer with better information
• Protect consumer against possible hazards from
  product
• Towards competitive pricing

20
Business and Community

• Request Made to Business
• Assistance for less advantages people
• Support for air and water pollution control
• Support for cultural and artistic activist
• Employment and advancement of minority and women
• Assistance in urban planning and development
• Support of health care program
• Donation

21
Business and Community

• Community Services Desired by Business
• Complete Public Services
• Cooperative problem solving approach in working
  with mutual benefit
• Equitable taxes
• Cultural and recreational environment that
  support a balanced quality of life for employee
• Adequate family recreational facilities
• Etc

22
Business and Government

• Assure good and beneficial relations between
  business ant its stakeholder
• Regulating Empowering Controlling

23
Business Environment
Corporate Managers
need
Environmental Knowledge
for
Corporate Strategic Planning
Copying With Public Policies
Linking Business Action to Social Values
24
Type of Business Environment

• External Environment
• Societal ( Macro ), influence the entire
  businesses in the same way and magnitude
• Stakeholder, do not influence the business in the
  same way and magnitude
• Internal Environment

25
Societal Environment
Sociocultural Forces
Economic Forces
Stakeholder Environment

• Internal
• Structure
• Culture
• Resources

Secondary Stakeholder
Primary Stakeholder
Technological Forces
Political-Legal Forces
26
Internal Environment

• Identify strength and weaknesses for responding
  to the external environment
• Corporate Structure
• The way of the corporation is organized in term
  of authority, work and information flow,
  communication
• Corporate Culture
• The collection of beliefs, expectation and value,
  shared by its members
• Produce norms that shape the behavior of
  employees
• Corporate Value
• Explain the action taken with respect to an issue
• Corporate Resources

27
External Environment

• Identify opportunities and threats for survival
  and future success

Economic

• Interest rate
• Unemployment
• Inflation,GNP
• Poverty Rate, etc

• Political relationship,
• processes, changes
• Stability of Government
• Regulation Legal aspect
• Social Value, etc

Business Firm
Social
Politic

• Demographic
• Life style
• Population Growth
• Age Distribution
• Social Value, etc

• Product Process
• Innovation
• Scientific Discovery
• Etc

Technology
28
Basic Strategies of Environmental Changes

• Inactive Strategy
• Do nothing
• Reactive Strategy
• Environment changes first ant then organization
  responds to it
• Proactive Strategy
• Organization initiates changes and than
  environment altered
• Interactive Strategy
• Organization and environment are changing
  simultaneously in the same direction

29
Linking Environmental Analysis To Planning
Scanning
Monitoring
Forecasting
Scenario Building
Analysis Opportunity Threats
Strategy Development
Issues Management
Contingency Planning
Action